Tax Deductible Travel
If my family and I are on vacation and I make arrangements to meet up with a realtor, discuss the local market, and view an investment property or two and buy them lunch for their efforts, I can deduct the trip (my portion not my families) correct? If so what documentation do I need for my tax return?
In my opinion, I don't think the deduction would be allowed if the primary purpose of your trip is vacation and that was how you spent most of your time.
Change the character of the trip. Make the trip an investment search for yourself. Spend most of your time on the trip on business. You might have an argument for taking a business travel deduction for your individual costs, while the extra expenses you incur for your family to tag along are non-deductible personal expenses.
Good question to ask your professional tax advisor.
My accountant told me that if I buy a place, I can then deduct air travel expenses and the like. If I don't own a place and are "just looking" it is not deductible.
Just what I have been told, do not know if it is 100% correct, or if there is a gray area.
I guess I'm all for deducting everything I can. I would deduct travel expenses for myself and wife (business partner), but not the children. I would deduct car, and hotel. But I would also probably spend at least 1-2 hours a day looking around at the market. You'd be surprised at how much you can learn just by driving and walking around and talking to people about the area.
For documentation, I usually make sure to charge everything, that way it shows up on my credit card bill and I can use that for documentation.
My $0.02
It's always good to get a business license in your local city to prove that you have a valid business as well.