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Discussion Forum Index --> Tax Questions --> Business trip with spouse
ArchCPA (talk|edits) said:
| 1 April 2006
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| My client who owns a software development company (S-Corp) wants to visit India with his wife for two weeks. Wife is a 50% stockholder in the corporation, and is a homemaker. Client wants to know if his wife's business travel expenses (airfare, lodging, etc) can be deducted. I've advised him that for an overseas travel of more than one week, he has to apportion costs between personal and business, and not deduct his wife's airfare. Any thoughts?
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Tctaxserv (talk|edits) said:
| April 1, 2006
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| I would say the standard travel rules apply. The fact that she is a 50% stockholder should not make a difference. If for business purposes she is not needed the airfair is not deductable.
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Albundy (talk|edits) said:
| 1 April 2006
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| The week long test is only one of the exceptions that allow you to deduct 100% of the expenses for travel outside of US. There are 3 other exceptions as well. Publication 463 discusses this. Thus there is a chance that the time period won’t affect things. Other things are more impoortant, such as legitimate business prupose. If you decide to try, make sure the trip is for legitimate business purposes and that she participates. Meeting with potential partners, touring facilities, researching laws & customs, etc. are things you’ll probably do while there. Make sure everything is documented and have a Board of Directors Meeting while there to go over findings and make crucial decisions. Also, have a meeting and pass a Resolution beforehand authorizing the trip before you go. If you meet one of the four exceptions, 100% of your expenses could be deductible. If not, you can still deduct a portion for business use. Refer to the publication and its allocation rules. Subject to the above, I feel you have a good argument.
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Klesher (talk|edits) said:
| 1 April 2006
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| Cannot take wife expenses - does not matter if 50% shareholder
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