NYC condo hotel as 2nd office = big tax deduction???
As full time freelance travel shooter
I already have home office / residence / FL Am anticipating a lot of NYC visits next 10 yrs to shoot a lot of stock photography... Normally it would involve hotels (100% deductible) & travel meals (50% deductible)... Am contemplating investing in NYC hotel condo & staying ~5 mos annually, leasing ~7 mos. (NYC resident taxes triggered at 6 mos 1 day) Is anyone doing this or similar? Can I claim entire apt. as 2nd office if entire time there is spent working (+ sleeping) (like 100% deductible hotel room) or is it a 2nd home office that must be divided into work area & non-work area? Of course, will call IRS to ask questions more than once, more than one agent, to make sure I'm getting same answers per same questions. But if anyone has expertise-experience, responses appreciated!!! :D:-:@:-)^:D:-:@:-)^:D:-:@:-)^ |
I'd value an experienced accountant's opinion above what I got from the IRS. Be aware that some accountants follow the maxim "it's better to ask for forgiveness than permission," meaning they advise clients to claim deductions aggressively. An experienced one will guide you towards a deduction level that balances the increased risk of an audit, and its cost, against the potential tax savings.
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residences are not the same as hotel rooms
why hotel residence? why not apartment? if by lease you mean include in hotel inventory, it may not get the revenue you want. if regular lease, doesnt have to be hotel. although the one thing about hotel residences that can be in hotel inventory is not having the 30 day or 1 year minimum. |
IME many accountants are too conservative because they fear that if an audit leads to additional taxes,, you will blame them.
IANAL but it sounds like FL will remain as your tax home, so that temporary apartment expenses, just like hotel expenses, are deductible if reasonable and necessary. So even if you must divide into office and temporary home, it should still be deductible. However, you might need to be careful if the majority of your income comes from NYC. If you're buying rather than leasing the condo, would your business purchase it? Does this affect mortgage interest deductibility or have real estate tax implications? In fact, do association rules permit your planned extent of home office use? Meeting clients regularly could be a problem. Could storage of chemicals become an issue? |
meeting clients would be ok with hotel residence that can be put in hotel inventory.
agree re condo associations / coop boards, have to know all the details. agree real estate tax is big, unless doing one of the new (all expensive?) buildings. also - can do corporate rate at hotel, rent/lease a hotel room, prepay hotel expenses |
Originally Posted by MSPeconomist
(Post 26970476)
IME many accountants are too conservative because they fear that if an audit leads to additional taxes,, you will blame them.
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Originally Posted by ajGoes
(Post 26970687)
When I set up my consulting business, my accountant told me that he considered any audit where the client didn't have to pay something extra a failure. It meant he hadn't been aggressive enough. He made sure to explain that to me at our first meeting.
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Originally Posted by rbwpi
(Post 26971239)
That's basically what I convey to potential clients. "Some clients will complain if they owe money as a result of an audit. Then there are smart clients, who if they don't owe money will complain."
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Originally Posted by TravelPhotographer
(Post 26968276)
As full time freelance travel shooter
I already have home office / residence / FL Am anticipating a lot of NYC visits next 10 yrs to shoot a lot of stock photography... Normally it would involve hotels (100% deductible) & travel meals (50% deductible)... Am contemplating investing in NYC hotel condo & staying ~5 mos annually, leasing ~7 mos. (NYC resident taxes triggered at 6 mos 1 day) Is anyone doing this or similar? Can I claim entire apt. as 2nd office if entire time there is spent working (+ sleeping) (like 100% deductible hotel room) or is it a 2nd home office that must be divided into work area & non-work area? Of course, will call IRS to ask questions more than once, more than one agent, to make sure I'm getting same answers per same questions. But if anyone has expertise-experience, responses appreciated!!! :D:-:@:-)^:D:-:@:-)^:D:-:@:-)^ Having given you my amateur opinion, follow others' advice and tax to a tax accountant first. |
Originally Posted by TravelPhotographer
(Post 26968276)
(NYC resident taxes triggered at 6 mos 1 day)
NOTE: I am not a CPA or tax attorney, this is just based on my experience of having had to pay NYS income tax in the past. Anyone can feel free to correct me. And since this is FT, I'm sure I'd be corrected even without that note. :p |
Originally Posted by ajGoes
(Post 26970687)
When I set up my consulting business, my accountant told me that he considered any audit where the client didn't have to pay something extra a failure. It meant he hadn't been aggressive enough. He made sure to explain that to me at our first meeting.
Also, to the OP: what about renting an apartment through your business, and letting it out via services such as AirBnB when you don't need it for work? |
Please get professional tax advice instead of asking us here about prepaid travel or NYC apartments. Your advice here is worth exactly what you paid for it. You're not the first small business to have a good year and want to shelter it all. Most of the obvious ways are dead now. I don't want you to spend a bunch of money then find out later it's not deductible.
And don't rely on the irs for advice. That's not how it works. |
Originally Posted by darthbimmer
(Post 26972004)
Also, to the OP: what about renting an apartment through your business, and letting it out via services such as AirBnB when you don't need it for work?
http://gothamist.com/2016/06/18/its_...o_advertis.php |
hotel residences that can be included in hotel inventory are ok to rent for less than 1 month
meeting clients there would also not have problems like with owners/renters boards i dont think OP is in market for brownstone, but 'single owner' buildings also ok for renting |
Some points & clarifications:
Some free advice is worth lots more that what's paid for it. Especially if from authoritative sources or from those with on-target experience. Wheat, chaff... Am considering specifically 1bd or studio in The Plaza Hotel -- yes I know about issue of prices not previously rising like other bldgs. Update: forget Plaza, condos are separate entity in same building unassociated with hotel... I would occupy hotel condo ~4 mos & will research if leasing-renting ~8 mos will cover annual expenses. I do not know what role hotel plays as renter, but there are realtors advertising apts. for lease... I do not receive clients. I go out daily to make new images. I would process-keyword images in hotel-condo when not out, also eat, sleep. Home office percentage determined by area used exclusively for business. But the question is: if hotel room is used for sleeping + eating + working + base for working in area & is 100% deductible, would an "owned-by-me" hotel condo 2nd office be a likewise 100% deduction or be an area-devoted-to-work-only partial deduction, as is primary home office??? Please, if possible, provide link to any 14-15 work day rule for NY or NYC. I only found definition for NYC resident & therefore NYC residential taxes to be if one is in NYC-NY any part of a day for 1/2 year plus one day... e.g., daily commuters from CT/NJ have been stung by NYC residential taxes. Thanks for responses. Wheat winnowing in progress... :D :D :D ^ ^ ^ |
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