Can I treat a bicycle as a CFI business expense?

RussR

RussR

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Yes, yes, I know, call my accountant, but it’s Sunday.

If I owned a (regular) company and we had a company gym, the exercise equipment could easily be written off as a business expense. I found several websites discussing that.

I am a CFI. I claim my income and expenses on Schedule C like I imagine many of us do. I have some exercise equipment around. I bought a new mountain bike last year, the purpose for which is, of course, fitness. The bike, and all of my other equipment like the elliptical machine which I hate and some free weights, is available for use by any of my employees who want to use it. Of course, I currently have one employee, myself.

Anybody claimed something like this as a business expense?
 
How often do you get audited? ;)

my accountant says to report everything you earn, and deduct everything you can think of. His philosophy is that unreported income will be seen as evasion, but deducting something that maybe can’t be deducted will be seen as more of an honest mistake.

But to directly answer your question, no, I haven’t, but I know people in other one-horse operations that expense that kind of health-related equipment. What I don’t know is how they account for it.
 
Fringe benefit rules are complex. I think gym equipment has a requirement that it be the on premises of the employer and available only to the employee and his spouse/kids.

As a CFI, I think a bike to get around the airport to see different clients or some weights that are used as teaching tools to illustrate W&B are a much easier case to make as a deductible expense that isn’t actually part of a gym.
 
Hang 4 said:
Remove front wheel of bike. Hand it to student and have him spin it while holding the axle. Then have him try to move it. Now he knows how the gyros work. Deductible teaching aid.
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I had a corkscrew like that, except I wasn’t able to itemize.
 
You can deduct anything until the IRS says "no". You can make a good case for its deductibility, so probably worst case it would be disallowed in an audit. All in all, pretty small potatoes.
 
Hang 4 said:
Remove front wheel of bike. Hand it to student and have him spin it while holding the axle. Then have him try to move it. Now he knows how the gyros work. Deductible teaching aid.
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make sure you snap a pic as evidence! Hard to argue that.
 
I would consider an employee gym at a business with employees to be a fringe benefit or perk and so the equipment would be deductible. However, a bike or other fitness equipment that is used only by the individual who is the business owner and maybe sole employee would be personal equipment and not a business expense.
 
put a logo/phone #/sign, ride around airport, it’s a advertising expense. :rolleyes:
 
I don't think the purpose is fitness. I think the purpose is to prepare you for the FAA required medical or basic med review that you're required to have for your work. I don't know if that makes it deductible or not.
 
NealRomeoGolf said:
Is the bike only for business? 50% for business?

I say no, but that's why I'm a real accountant instead of a tax accountant.
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If I were smart enough to be a real accountant instead of a tax accountant, I may be offended.

Funny, slightly relevant story. I work for a big firm and was on the phone with a big shot important national practice audit partner explaining the tax implications of a transaction years ago. She apparently didn’t realize I was the tax guy and stopped to tell everyone on the call that she doesn’t trust tax people because “they’re not real accountants.” I still tell people I’m not a real accountant even though 75% of my time is spent on tax accounting now.
 
If you have an entity and the entity buys an asset, such as gym equipment, then that would deductible subject to the asset amount and whether the deduction is immediate or depreciated. It’s important for your entity to have its own bank account that is separate from yours, and you’d need to save the receipt.

Unfortunately, using a Schedule C increases your chance of audit substantially. However as you said you are an employee and thus that means you’d be receiving a W2 and paying employment taxes, SSI medicare, etc, the government is probably more concerned about receiving those taxes vs a few hundred bucks for gym equipment.
 
mandm said:
If you have an entity and the entity buys an asset, such as gym equipment, then that would deductible subject to the asset amount and whether the deduction is immediate or depreciated. It’s important for your entity to have its own bank account that is separate from yours, and you’d need to save the receipt.

Unfortunately, using a Schedule C increases your chance of audit substantially. However as you said you are an employee and thus that means you’d be receiving a W2 and paying employment taxes, SSI medicare, etc, the government is probably more concerned about receiving those taxes vs a few hundred bucks for gym equipment.
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Section 179 deductions allow immediate and full expensing of capital equipment purchases, and the likelihood of the OP being audited because of the deduction is less than 1%. There is no disadvantage for a person using Schedule C not having a separate bank account.

Advice is great, but erecting intimidating scenarios that serve no real purpose isn't.

:rolleyes:
 
It's these types of questions that made me avoid tax accounting in my profession. Everyone is trying to get away with something. Putting this as a deduction is a sham (sorry Russ....no offense) because it has nothing to do with the business. That's the breaks of being a sole proprietor.

I also didn't go into tax because nobody would hire me with advice like this.

Sorry to not call you real @aggie06 . :)
 
I found this, which pretty much directly answers my question, and the answer is "no". Cited is an actual case on this topic from 1991 (?). Briefly, the guy was an accountant for a company and also did accounting as a side business using Schedule C (much like me as a CFI). He wanted to claim his home gym equipment as an expense. He tried two arguments: 1) it was necessary to maintain his health due to the long hours he worked, and 2) as an employer, he was providing the equipment for his employees (of which there were none, exactly what I went with in my OP). The court said 1) no, because health is inherently personal, and 2) no, because you don't actually have any employees.

So pretty much my exact question.

Here is the case:

https://www.bradfordtaxinstitute.com/Endnotes/TC_Memo_1991-605.pdf

And here is the website article that discusses it and similar "gym" expenses:

https://bradfordtaxinstitute.com/Content/Business-Gym.aspx

It's not often I find the exact answer to a question I have on tax law.

Even after 10 years of being a CFI, I still sometimes find it hard to wrap my head around the idea that I am a "business", like Walmart only a little smaller. Much of that "wrapping my head around" is probably a result of not having an "office". But it's still a business, and I can often deduct a lot of similar things, even things that I would have bought anyway back when I was still flying as a hobby. iPad, Foreflight, headset, insurance, attendance at trade shows, etc.

So, I don't think the "bike" question is totally unreasonable. I mean, if I owned a small business with 10 employees and had a company gym, that gym equipment would clearly be a valid expense. Most (all?) of my other (valid) expenses don't have any relationship to the size of the company, so this seemed like a reasonable question. And, apparently, one that's been asked before!
 
RussR said:
I found this, which pretty much directly answers my question, and the answer is "no". Cited is an actual case on this topic from 1991 (?). Briefly, the guy was an accountant for a company and also did accounting as a side business using Schedule C (much like me as a CFI). He wanted to claim his home gym equipment as an expense. He tried two arguments: 1) it was necessary to maintain his health due to the long hours he worked, and 2) as an employer, he was providing the equipment for his employees (of which there were none, exactly what I went with in my OP). The court said 1) no, because health is inherently personal, and 2) no, because you don't actually have any employees.

So pretty much my exact question.

Here is the case:

https://www.bradfordtaxinstitute.com/Endnotes/TC_Memo_1991-605.pdf

And here is the website article that discusses it and similar "gym" expenses:

https://bradfordtaxinstitute.com/Content/Business-Gym.aspx

It's not often I find the exact answer to a question I have on tax law.

Even after 10 years of being a CFI, I still sometimes find it hard to wrap my head around the idea that I am a "business", like Walmart only a little smaller. Much of that "wrapping my head around" is probably a result of not having an "office". But it's still a business, and I can often deduct a lot of similar things, even things that I would have bought anyway back when I was still flying as a hobby. iPad, Foreflight, headset, insurance, attendance at trade shows, etc.

So, I don't think the "bike" question is totally unreasonable. I mean, if I owned a small business with 10 employees and had a company gym, that gym equipment would clearly be a valid expense. Most (all?) of my other (valid) expenses don't have any relationship to the size of the company, so this seemed like a reasonable question. And, apparently, one that's been asked before!
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Buying gym equipment installed in the office, open for office employees to use is clearly not a personal expense. You wouldn't buy 3 treadmills and build a gym in your office building for yourself. Buying a bicycle on the other hand...
 
It's a slippery slope. For sole proprietors it really has to be for the furtherance of the business. Otherwise, why not deduct your food? You need that to live, and you if don't live, your business is dead. The bike to maintain health. Same argument. Which is exactly why you can't do it, as you found. As you and Salty said above, it becomes different when you start providing for other employees.
 
RussR said:
I found this, which pretty much directly answers my question, and the answer is "no". Cited is an actual case on this topic from 1991 (?). Briefly, the guy was an accountant for a company and also did accounting as a side business using Schedule C (much like me as a CFI). He wanted to claim his home gym equipment as an expense. He tried two arguments: 1) it was necessary to maintain his health due to the long hours he worked, and 2) as an employer, he was providing the equipment for his employees (of which there were none, exactly what I went with in my OP). The court said 1) no, because health is inherently personal, and 2) no, because you don't actually have any employees.

So pretty much my exact question.

Here is the case:

https://www.bradfordtaxinstitute.com/Endnotes/TC_Memo_1991-605.pdf

And here is the website article that discusses it and similar "gym" expenses:

https://bradfordtaxinstitute.com/Content/Business-Gym.aspx

It's not often I find the exact answer to a question I have on tax law.

Even after 10 years of being a CFI, I still sometimes find it hard to wrap my head around the idea that I am a "business", like Walmart only a little smaller. Much of that "wrapping my head around" is probably a result of not having an "office". But it's still a business, and I can often deduct a lot of similar things, even things that I would have bought anyway back when I was still flying as a hobby. iPad, Foreflight, headset, insurance, attendance at trade shows, etc.

So, I don't think the "bike" question is totally unreasonable. I mean, if I owned a small business with 10 employees and had a company gym, that gym equipment would clearly be a valid expense. Most (all?) of my other (valid) expenses don't have any relationship to the size of the company, so this seemed like a reasonable question. And, apparently, one that's been asked before!
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You need an employee. I will work for you from home for 1 hour a week at minimum wage. I won't actually cash my paycheck. Just send me a video of you riding your bicycle demonstrating to me what I should do with my bicycle to remain a healthy and productive employee.
 
Can't teach without wearing underwear. Soap and deodorant? Toothpaste? How about that trip to the dentist? Can't teach if you have gingivitis...
 
One of the websites I came across while researching this was something like "strange tax deductions that are actually legal".

One was, if you're a professional bodybuilder, the oil you use to make your muscles shine for a competition is a valid business expense. But the supplements and vitamins and such are not.
 
RussR said:
One of the websites I came across while researching this was something like "strange tax deductions that are actually legal".

One was, if you're a professional bodybuilder, the oil you use to make your muscles shine for a competition is a valid business expense. But the supplements and vitamins and such are not.
Click to expand...
I guess the Chesty Love case didn’t make it to that article?
 
My theory is "if you have to ask, chances are it is not kosher.."
 
I was thinking about your post the other day when I realized you MAY be able to write off a bike... or two. I have been teaching my son how to ride a bike lately and realized there are some strong correlations to primary flight training. Slow flight and control inputs, turn radius in relation to speed, etc. You could set up a rectangular course and 'chair fly' with your student on the bike (including simulated radio calls).

Much cheaper than burning avgas for the student and likely to still help with understanding these topics.
 
You have a requirement to stay fit and healthy to maintain your medical, No medical, no business.
 
Consider the bike your means of transportation and it is legit.

Gotta get around the airport somehow, right?
 
If you have a business then open a separate bank account in the business name and get a business credit card. Every time you go to the hardware store or Office Depot use the card. Buy the bike on the card. CYA
 
RussR said:
Yes, yes, I know, call my accountant, but it’s Sunday.

If I owned a (regular) company and we had a company gym, the exercise equipment could easily be written off as a business expense. I found several websites discussing that.

I am a CFI. I claim my income and expenses on Schedule C like I imagine many of us do. I have some exercise equipment around. I bought a new mountain bike last year, the purpose for which is, of course, fitness. The bike, and all of my other equipment like the elliptical machine which I hate and some free weights, is available for use by any of my employees who want to use it. Of course, I currently have one employee, myself.

Anybody claimed something like this as a business expense?
Click to expand...

I like the concept. Can I write off my kitchen remodel as a employee break room?
 
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Yeah the "it's for the employees, of which I'm the only one" is not a valid reason for a deduction in any situation.
Next, I think it's pretty obvious that a mountain bike isn't really a fitness tool, it's an entertainment tool with a fitness byproduct. Not part of a gym any more than a surf board is.

At the end of the day write offs/deductions are all your decision, until you get audited.

Fun game to make a decision on whether it's deductible:
Imagine you're audited and you have an IRS auditor sitting on the other side of your desk asking you about the deduction. You have to justify it with a straight face.
If (in your imaginary office with the imaginary auditor) you see them roll their eyes you probably shouldn't write it off :D

IMO the mountain bike doesn't pass the test.
If it were just a bicycle that you kept at the airport to run around to different hangars to meet students then sure.
 
I already determined that a mountain bike wasn't a valid tax deduction in my situation in post #17. So put that issue aside. But your comment here I don't understand at all:

Justin Brady said:
Next, I think it's pretty obvious that a mountain bike isn't really a fitness tool, it's an entertainment tool with a fitness byproduct.
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I don't think that's "obvious" at all. Where do YOU draw the line on fitness equipment vs recreational equipment? I know when I come back from a ride I am dripping with sweat and my heart rate has been consistently elevated just as if I had been running or some other cardiovascular exercise. I can tell you that although I do find biking fun, the main reason I do it is in fact for exercise and to avoid the typical results of a pilot's primarily sedentary lifestyle.

I honestly don't understand your quoted statement.
 
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RussR said:
I already determined that a mountain bike wasn't a valid tax deduction in my situation, 5 months ago in post #17. So put that issue aside. But your comment here I don't understand at all:



I don't think that's "obvious" at all. Where do YOU draw the line on fitness equipment vs recreational equipment? I know when I come back from a ride I am dripping with sweat and my heart rate has been consistently elevated just as if I had been running or some other cardiovascular exercise. Does the bike have to be a stationary bike for it to be considered "fitness equipment" in your opinion?

I'm curious here, since the best way to improve fitness is to engage in an activity that you also enjoy at least to some extent. Or are you suggesting that in order to be a "fitness tool", it has to be boring to use? To me that would consist of anything in a gym - free weights, weight machines, treadmills, ellipticals. Great for fitness but boring.

Are you suggesting that road bikes are not a fitness tool either? That anyone out there biking is just doing it for fun? I can tell you that although I do find biking fun, the main reason I do it is in fact for exercise and to avoid the typical results of a pilot's primarily sedentary lifestyle. Some people enjoy running, does that mean it doesn't count as primarily fitness oriented? How about swimming? How about triathletes, are they just doing it for the entertainment?

I honestly don't understand your quoted statement.
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I'm not going to argue any of your statements as they are obviously all valid.
I was simply talking about it from a tax writeoff perspective.
A gym in an office building is certainly a tax deduction, however the business owner's mountain bike is not.

I was not arguing the fact that a mountain bike is a workout (or a road bike for that matter), simply the fact that a mountain bike is going to be difficult to justify to the IRS as a legitimate business expense unless you're in a business where it's purchase is "ordinary and necessary" which is the IRS guidance on taking write offs. The argument could potentially be made for buying gym bikes to allow employees to use during work hours in the fitness center, but again that requires a fitness center, your home gym doesn't count when you're the sole employee without a facility.

Wasn't trying to be argumentative or derogatory, apologies if it was taken that way!
I ride as well, but my personal bikes are not a writeoff and while I could come up with a "plausable" story as to why my purchase of them is relevant to my manufacturing business, at the end of the day I know it's just a justification to save a few bucks and not a legitimate business expense.
 
I don't think the credit card by itself is enough to make it deductible. I say that because we had a guy use his corporate card to rent a Volvo and lets call them dancers for a trip to a casino, and he wasn't successfully able to expense or deduct any of that. My take away was that I learned that it was possible to rent a Volvo.
 
It's transportation. The % used for business can be deducted. Same as if you purchased a motor vehicle.
 
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