Guest Post: Extraordinary Tax Deductions

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    Okay, admit it: As you’ve struggled with your tax return, trying to come up with some extra deductions to pump up your refund or reduce what you owe, you’ve taken a few flights of fancy. “Can I claim a deduction for all those blood donations at the Red Cross?” Nope. “How about a charitable contribution for all the time I donate to the church?” No, again. “Can I count the wedding gift for my boss’s daughter as an employee business expense?” Come on! On the other hand, your fellow taxpayers have successfully claimed write-offs for many things that most of us wouldn’t even imagine, ranging from cat food to a casualty loss for a vehicle totaled by a drunk driver. Here are 15 of our favorites.

    Burning Down the House

    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.

    Significant Other

    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.

    Playing Bass

    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.

    Airplane

    Rather than drive five to seven hours to check on their rental condo or be tied to the only daily commercial flight available, a couple bought their own plane. The Tax Court allowed them to deduct their condo-related trips on the aircraft, including the cost of fuel and depreciation for the portion of time used for business-related purposes, even though these costs increased their overall rental loss on the condo.

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    (via Jerry Jones, The Self-Storage CPA)

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