TravelPhotographer

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!!!
:-:@:-)^:-:@:-)^:-:@:-)^

ajGoes

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.

Kagehitokiri

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.

MSPeconomist

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?

Kagehitokiri

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

ajGoes

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.

rbwpi

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."

ajGoes

Of course, the amount of money owed makes a difference.

Tchiowa

From my experience you can only deduct the portion of it that is actually used for business. If, for example, you have an office in your home. You can only deduct a small portion of the home expense as a business expense based (more or less) on the ratio of the business expenses to the home expenses. If you're buying a condo and only going to be spending 10% of your time in it for business I would expect you'd get to deduct the 10%.

Having given you my amateur opinion, follow others' advice and tax to a tax accountant first.

gobluetwo

Note that NY is one of the more gung ho states about collecting non-resident income taxes. Given the amount of time you'll be spending in NY, you'll still be required to file a NY tax return every year (I think it triggers at 14 or 15 days worked in-state).

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.

darthbimmer

Whether or not that's wise depends on how aggressively the CPA pursues questionable practices. I get the cost/benefit calculation of reasoning that extra taxes owed in an audit represent extra money you keep for yourself when you don't get audited. The problem is, that cost-benefit calculation is not complete. One also has to factor in 1) the costs of one's own time plus the accountant's bills for undergoing the audit, if said questionable practices triggered or increased the likelihood of that audit; 2) any penalties associated with the additional taxes owed; and 3) the costs of subsequent audits, if this audit, the practices that led to it, or the discrepancies exposed in it cause you to be flagged for increased scrutiny in the future. Basically, I'm saying don't try to cheat the IRS. Definitely seek advice from at least one CPA, but definitely ask questions to determine if the accountant's idea of suitable risk matches your own risk tolerance.

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?

TravelerMSY

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.

sbm12

This is a very bad idea in New York these days.
http://gothamist.com/2016/06/18/its_...o_advertis.php

Kagehitokiri

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

TravelPhotographer

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...
^ ^ ^