Business costs and tax deductions

Business costs and tax deductions

Generally, a taxpayer can deduct costs incurred in the course of operating a business if the costs can be proven. This includes costs for “listed property” (property used for transportation, entertainment or recreation). To prove business use of listed property, taxpayers must keep adequate records of total use and business use, plus dates and the business purpose. One married couple purchased a yacht and an RV and contributed them to a marina they owned. They deducted depreciation for both on their tax return, but the IRS denied the deduction. The 10th Circuit Court of Appeals agreed, noting that records didn’t prove the vehicles were used in the marina business. Discuss business costs and tax deductions with one of our experts