When it Comes to Duplicated Expenses, its All About the Home / Dwelling

A lot of Travelers mistakenly think that paying rent is a magic carpet ride to a tax home. This is not the case. You must be maintaining a dwelling that you use for your own lodging. Paying rent and maintaining a home you pay rent for are different things. That means the following types of arrangements that some speak of do not rise to the level of a “maintaining a dwelling”:

  1. I give Mom some money
  2. I help out with expenses
  3. I pay a utility bill
  4. I help out when at home
  5. I help my aunt out by sending her money
  6. I pay for a storage unit
  7. A combination of the above

When its an arrangement with a related party, the entire package needs to look, smell and taste like a real rental OR an equitable sharing of expenses.

The court case linked below distinguishes #5 above from a real rental or maintenance of a home. As the discussion states, “[t]he reason for allowing deductions for expenses while away from home {and / or allow tax free reimbursements (per diems) is to mitigate the burden placed on taxpayers who, for business reasons, must maintain two places of abode

In the case the taxpayer tried to use her benevolance payments to an aunt as proof of duplicated expenses.

Valdez v Commissioner

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