PPL flight instruction costs and tax deduction question

midcap

midcap

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midcap
I was curious if my lesson costs are tax deductible on my schedule C. I am getting my PPL to visit clients, investment property and money managers who normally are not near any commercial airports. Also fly from office to office which are 300nm apart.


any one here familiar with the tax code on this issue?
 
Arthur Gunn, @asgcpa, is a CPA and might be able to answer the question.
 
Yes, thus the @ symbol and the user name
 
Or send him a private message?
 
I would like to know the answer to this as well. My tax guy said no.
 
455 Bravo Uniform said:
I would like to know the answer to this as well. My tax guy said no.
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What do you do for a living, what may have somthing to do with it?

I figure instead of flying commercial then having to rent a car and travel another hour after that. Just flying to the local GA airport would save time and money for me.

For example, I'd have to drive an hour to MSY, then pay $600 for a ticket to SHV, then another $100 or so for a rental car, then another $150 for a hotel.

with a plane, i'd just have to use the FBO's loaner car for a few hours and head home.

Even if I rented the 172M, that's a whopping $360 for the whole day.

It's even worse if I need to visit my office in Mississippi.
 
I work for a company, but have some local real estate investments and others that I "prospect" from time to time. I also do a little consulting on the side (local clients). I could easily expand my real-estate radius and maybe try to spread my consulting distances as well.
 
455 Bravo Uniform said:
I work for a company, but have some local real estate investments and others that I "prospect" from time to time. I also do a little consulting on the side (local clients). I could easily expand my real-estate radius and maybe try to spread my consulting distances as well.
Click to expand...

I got ya....I am a little different, Sole prop.

My main job is meeting with clients and doing due diligence on investment companies and assets in which I am already invested in or possibly could be.
 
I would advise speaking to your tax advisor as I can't give specific advice. My response (here comes the disclaimer) should not be taken as tax advice but as a general talking point got you to head in a direction for research to answer your question.

Generally, paying to learn a new trade or business (or learning a new skill) is NOT deductible. If you pay to enhance your knowledge in the SAME trade or business it may be deductible. Example - As a CPA, if I learned to fly and got a commercial rating/CFII it would NOT be deductible. Why? It qualifies me for another trade or business. However if I got a MAcc or similar accounting degree there would be grounds for potential deductibility. Why? Because I am improving my skills and knowledge in my CURRENT trade or business.

To midcap's question: If you have to visit clients, you potentially could deduct only those trips to clients if they were "necessary" and the costs "reasonable". What could be grounds for reasonable? Commercial flights to close airports and ground transportation to your clients as examples. The trips may be subject to applicable travel rules. IMO, the total cost of learning to fly would NOT be deductible.

Sorry about being vague, but since you are not a client of mine and I don't know your specific circumstances, I cannot give you an answer and therefore I suggest contacting your tax advisor or finding one....
 
I give the same disclaimer as asgcpa since I don't actively do tax but have the license. Publication 535 says "to be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your industry." I would also have the opinion (which should not be taken as tax advice) that the cost of learning to fly would not be deductible.
 
Asgcpa's answer is the same I was given by my tax accountant. Since flying would be a new career if I took it up as a job, costs of training are not tax deductible.
 
Here's one answer: training to improve a skill you already have and earning money with is tax deductable. Training to learn a new skill that does not relate to your current employment is not tax deductable.

. . . especially on Schedule C . . . and especially if you are self employed . . .

That's free advice and worth every penny of it.
 
And I should remind everyone that historically the IRS audit rates of Schedule C businesses are substantially higher than the historical audit rates of other entity types.

So besides wanting to deduct all flight training being incorrect, it is also riskier given the type of entity. If it were my client I wouldn't sign the return.....
 
Just a datapoint.

At the advice of my CPA, I deducted my instrument training when I owned my first construction company. I was building in five or six states at the time, the company owned the 182, and I flew back and forth to all the projects.

"Damned right it's deductible, we need to keep the president of this company safe as he conducts his business." were her words.

That deduction survived an audit without question. IIRC it was a state audit, not fed, but it's been at least ten years ago so my memory is foggy. (Considering all the states I did business in, I typically got audited by someone almost every year.)
 
I know people who fly mostly for business deduct recurrent training, BFRs etc. Deducting your private pilot training would be like deductingg your initial bachelor's degree. Even if it is work related, I don't believe you can deduct initial qualifying education.
 
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