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Tax Court Disallows Deduction for Married Couple’s Travel Expense to Husband’s Construction Work Sites

A married couple was not allowed to deduct travel expenses for the husband’s travel to work at construction sites.  In the case, the couple lived primarily in a camper and mostly worked at construction sites in states other than where their primary residence was.  The Tax Court held that the couple was not allowed to deduct the travel expenses because neither of them were employed in the state where their primary residence was and they spent little or no time there, meaning they were not “away from home.”  The expenses were not considered ordinary or necessary because their transient lifestyle was a choice.

Editor’s Comment

If the couple in this case had spent most of their time at their primary residence and travelled from this residence to various construction sites, they may have been able to deduct the travel expenses.  But because the travel expenses they incurred appeared to be more by choice rather than necessary for the husband’s work, they were not allowed to deduct them.  To be deductible the expenses must be ordinary and necessary to generate income.

By: Basi & Basi at the Center for Financial, Legal and Tax Planning for Transworld M&A Advisors