Taking i-Lounge Classes To Write-Off the Trip

[Seabourn Pearls]

From a tax avoidance perspective, just wondering if anybody has any experience writing off all or part of the cost of their cruise? I was wondering about course offerings in the iLounge that could be classified as a business expense. Anyone? Anyone? Beuhler?

[dsrdsrdsr]

You'd be wasting your time trying under English law. Unless American taxmen are idiots, I suspect the same would be true in the USA, but I'd be interested to hear from any American accountants.

[kitty9]

Just taking some silly class on a cruise for 45 minutes out of a 7 day cruise would be pretty hard to prove as an expense. I asked my sister, who's a CPA and she said definitely not.

[Treven]

... Unless American taxmen are idiots, I suspect the same would be true in the USA, but I'd be interested to hear from any American accountants.

Unfortunately it's been my experience they aren't. :-(

Edited July 15, 2014 by Treven

[SadieN]

That loophole has been closed for a while now.

[fishywood]

Internal Revenue Code Section 274(h)(2) Conventions on Cruise Ships

 

...[N]o deduction shall be allowed for expenses allocable to such [a] meeting unless the taxpayer...established that the meeting is directly related to the active conduct of his trade or business and that---

 

(A) the cruise ship is a vessel registered in the United States; and

(B) all ports of call of such cruise ship are located in the United States or [its] possessions.

 

Looophole closed rather tightly. But if you are self-employed you can try to deduct any internet package or Cellular at Sea charges, subject as usual to being able to prove to the IRS that 100% of your internet and phone usage was business related.

Edited July 15, 2014 by fishywood

[mapsmith]

My CPA said that the only way I could deduct anything on a cruise was if more than one complete day (8hours) was spent in port dealing with vendors for my store. The only port that would work in is Vancouver, and I know the vendor would actually spend the entire day with me. (but I do have three vendors in Vancouver). But since it is an originating port, I could not deduct the cruise, just the hotel on the night before the cruise.

[Hflors]

I once worked with a man who's wife was a nurse. His in-laws were paying their way (the man I worked with and his wife the nurse) on a cruise so the in-laws could write their trip (all four of them) off on their taxes. Their reasoning (the in-laws) was that the in-law husband needed the trip for his health and also needed nursing care and his daughter the nurse was going to provide it while he was on the ship! We (co-workers) kept telling him not to do it, but he and his wife went along.

 

OF course this is the same person who did one of those "if you cash this $12,000.00 check you can keep $4,000.00 and just send me $8,000.00." Guess what happened to that check? We later asked him why he did it and he said he thought he had found a easy way to pay for his daughter's Disney World Wedding!!!!!

 

I still wonder if the IRS ever said anything about that trip!

[Nitemare]

I once worked with a man who's wife was a nurse. His in-laws were paying their way (the man I worked with and his wife the nurse) on a cruise so the in-laws could write their trip (all four of them) off on their taxes. Their reasoning (the in-laws) was that the in-law husband needed the trip for his health and also needed nursing care and his daughter the nurse was going to provide it while he was on the ship! We (co-workers) kept telling him not to do it, but he and his wife went along.

Your coworker has nothing to fear in this arrangement. Family can always buy them a trip.

 

OF course this is the same person who did one of those "if you cash this $12,000.00 check you can keep $4,000.00 and just send me $8,000.00." Guess what happened to that check? We later asked him why he did it and he said he thought he had found a easy way to pay for his daughter's Disney World Wedding!!!!!

 

I still wonder if the IRS ever said anything about that trip!

 

I'm sure if they had you never would have heard!

[xxoocruiser]

For a class to qualify under IRS tax law it would have be a considered a business deduction for work-related education. In order for it to be work -related education , education required by an employer or required by law it would have to be one of the following :

• Education To Maintain or Improve Skills
  
• Education To Meet Minimum Requirements
  
• Education That Qualifies You for a New Trade or Business
  

 

With that said only the cost for the specific course might possibly qualify for towards a deduction and not the total cost of the cruise.

 

I took a group cruise that included seminars specific to a medical condition. A friend of mine who is an IRS agent told me that since the seminars were specific to my medical condition a part of the cruise might qualify towards a tax deduction. However in order to qualify I had to break out the cost of cruise fare only down to the minute and use the minute rate times by the number of minutes which I attended seminars to determine the dollar value of the possible deduction. Also had keep lots of documentation and proof of the seminars / times. After doing all that it amounted to nothing that would have made any difference in the end result of my taxes so didn't even use the deduction.

Edited July 16, 2014 by xxoocruiser

[Calgon1]

Kinda brings a old, but very appropriate adage to mind . . .

"If you play with fire .... " :rolleyes:

[miched]

Why bother with peanuts when you can get the whole hog.

 

Have a doctor write out a note that you need to take a cruise and then write off the whole thing as medical expenses.

 

Cruise on 🌊🚢🇺🇸🌅

[Gail & Marty sailing away]

It all depends on what you do for a living..

[Hflors]

Your coworker has nothing to fear in this arrangement. Family can always buy them a trip.

 

 

 

I'm sure if they had you never would have heard!

 

Buying them the trip wasn't the issue. Its the "writing the expense for all four of them off as a medical deduction" on their taxes was what I thought could cause the problem

[peety3]

Not to twist the original question, but what about a photographer writing off part of a cruise cost as a cost of getting to the locations where he/she could take the images they later sold?

[navybankerteacher]

Not to twist the original question, but what about a photographer writing off part of a cruise cost as a cost of getting to the locations where he/she could take the images they later sold?

 

Legitimate travel expenses incurred in the course of pursuing a profession are deductible. What would have to be proven are:

 

A) the legitimacy of the expenses (cruise vs. air fare for example)

 

and

 

B) "pursuing the profession" (selling a few photographs is not considered a profession without their being a legitimate realization of profit).

[fishywood]

Not to twist the original question, but what about a photographer writing off part of a cruise cost as a cost of getting to the locations where he/she could take the images they later sold?

 

See my post number six--I was trying to keep it simple by confining it to the relevant code for cruise ships. Code Sections 274(h)(2)(A) and (B) are qualifiers to all types of deductions for business travel outlined in Code Section 162(a)(2) which is the general rule that permits the deductions that qualify. So unless on a US flagged ship going to solely US ports, no deduction for simple transportation would be allowed even if you could break out the portion of the cruise fare allocated solely to the movement of the ship between ports; in separate rulings the IRS has said you can't make that calculation in the first place.

 

The charter business took a big hit when this loophole was closed. When a professional organization does a charter or a large group booking, pretty much the only deductions are for educational materials that are purchased separately from the cruise fare. The demise of service club meetings where the ship passes out certificates of attendance is similarly due to their now lack of usefulness on one's Schedule A.

Edited July 16, 2014 by fishywood

[Capt_BJ]

every deduction is legal

 

until the audit . . . .

[peety3]

every deduction is legal

 

until the audit . . . .

Um, no. Or I suppose with your logic, cops enforce laws. (I finally figured out, now that I'm 40, that cops start a paper trail for other departments to enforce the penalties for breaking said laws. If cops were to actually enforce laws, they'd speed up to pass you, change lanes into your lane, and slow down to the speed limit.)

[notentirelynormal]

Um, no. Or I suppose with your logic, cops enforce laws. (I finally figured out, now that I'm 40, that cops start a paper trail for other departments to enforce the penalties for breaking said laws. If cops were to actually enforce laws, they'd speed up to pass you, change lanes into your lane, and slow down to the speed limit.)

 

OMG! He was kidding!

[TC1957]

Take a vendor or customer with you and charge it to the business as an expense. Then it is "entertainment" and travel expense. Probably a safe bet a customer would love a free vacation.

 

If you have partnership it reduces the profit on the partnership return and therefore reduces the income of the partners and if it is a corporation that is not traded publicly you may very well not be required to have a full audit performed. I have worked for a couple of small corporations that only had to have a review performed each year by a CPA for the banks...a review is a much smaller scale engagement and rarely goes into enough detail that you would have to restate anything for outsiders.

 

Of course in all things like this, consult your tax professional.

Edited July 17, 2014 by TC1957

[Lovely other]

My Husband can write off a cruise against tax as long as he has at least one meeting with the Cruise Director while on the ship ...he's a Magician

[dkjretired]

Um, no. Or I suppose with your logic, cops enforce laws. (I finally figured out, now that I'm 40, that cops start a paper trail for other departments to enforce the penalties for breaking said laws. If cops were to actually enforce laws, they'd speed up to pass you, change lanes into your lane, and slow down to the speed limit.)

 

Retired Police Officer, no clue what you are talking about.

[navybankerteacher]

My Husband can write off a cruise against tax as long as he has at least one meeting with the Cruise Director while on the ship ...he's a Magician

 

What????

[Capt_BJ]

like I said

 

this is FINE .. "I've done for years"

 

come audit time however ... do you know how many years they can go back once the door is opened?

 

I'm not a CPA, but I sleep with one

 

and BTW not all CPA's are created equal. A CPA specializing in audit may not give you the same advice as one who specializes in taxes.

 

Of course if your next door neighbor works for H&R you have nothing to worry about . .