Deducting Travel to 2nd Home

Today TaxMama hears from Matt in Texas who is quite creative. “I sold a second home last year and am wondering if I can claim my travel expenses to and from this property over the course of 3 years of ownership. The property was 350 miles from my primary residence and in a neighboring state. Although, I traveled each time to use the home for vacation, I always ended up doing maintenance to keep the property up and running. Just wondering if I could claim those travel expenses against the capital gains I am being taxed?”

Dear Matt,

Now that’s a question I’ve never heard before. You want to deduct the mileage to and from your visits to your vacation home. Just curious, where did you get the idea that this mileage is deductible? My first impulse is a flat “No!”

When it comes to the mileage to maintain a rental, that’s one thing. But for a vacation home? That’s not an option.

Let’s consider your suggestion to capitalize the mileage (to add the cost to your basis) to reduce your capital gains. Essentially, if the main purpose of your trip was for vacation, you’d have a hard time supporting those expenses as something you can add to your basis. But if you can prove that you devoted a substantial amount of the time during your visits to making repairs, doing maintenance and all those things you don’t want to spend most of your vacation doing…you just may have something here.

Let’s face it, sometimes, that’s exactly what does happen when you own a second home, or motorhome. You spend most of your time working on it, instead of enjoying it. So, if you think the mileage you can prove for maintenance was substantial, go back through your calendar for all those years. Find the receipts for tools and materials on the days you were working. Be very careful about your documentation of the working days vs goofing off days. If you spent too many days of your visiting vacation, you can forget the mileage deduction for that trip.

Incidentally, you can look up the mileage rates for the last several years here:
http://www.smbiz.com/sbrl003.html

And remember, you can find answers to all kinds of questions about travel expenses and other tax issues, free. Where? Where else? At TaxMama.com

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