Kiplinger: 15 Surprising Tax Deductions

Msn.com, December 16, 2014
Peter Blank, Kiplinger

1. A Breaking Bad wannabe purchased a building that had been used by a religious sect and turned it into a drug lab. Unfortunately for him, a hot plate ignited his volatile chemicals, and the resulting fire gutted the building, rendering it unusable. He claimed he was entitled to a $9,000 casualty loss. Even though he was involved in an illegal activity and acted negligently, the Tax Court allowed him to claim the write-off.

2. A man hired his live-in girlfriend to manage several of his rental properties. Her duties included finding furniture, overseeing repairs and running his personal household. The Tax Court let him deduct as a business expense $2,500 of the $9,000 he paid her but disallowed the cost of her housekeeping chores as nondeductible personal services.

3. An accomplished bass player and music professor laid a major beatdown on the IRS. He traveled to jazz rehearsals and performances to keep his skills sharp so he could play with other well-known musicians. The IRS said he could not deduct his travel costs because he enjoyed playing the bass and performing wasn’t part of his teaching duties. Nevertheless, the Tax Court allowed him the write-off because he translated what he saw and heard in the music scene and taught it to his students.

For the full list of surprises visit: http://www.msn.com/en-us/money/taxes/15-surprising-tax-deductions/ss-BBfBMvI

Davis and Hodgdon Associates CPAs has been assiting nonprofits, individuals and businesses with tax and accounting services in the Burlington Vermont Metro area for more than 20 years. If you have any questions or concerns please feel free to call 802.878.1963 or email [email protected].