View Full Version : Is hiking tax deductable?
Ron Haven
02-10-2008, 11:40
Hiking is a recreation and it is tax time.My accountant said an RV it is a tax write off if you use it 14 days out of a physical year.Does anyone know about hiking? Maybe all expenses are a tax write off in hiking if you hike more than 14 days also. :-?
This is a joke, I presume... :-? Since when is recreation tax-deductible?
What specific line or category would the hiking expenses full under?
Almost There
02-10-2008, 11:45
If we're talking hiking as a hobby...then you cannot write it off unless you make money off of your hobby. So I guess people like Lion King who makes films of his hikes and sells them could write off the expenses incurred with his hike, but for most of us....nope, in terms of an audit.....now if you don't get audited, roll the dice.;)
saimyoji
02-10-2008, 11:49
Find an MD who will diagnose you as under heavy stress in need of immediate therapy. Then you can justify your new gear as a write-off (a one time investment is cheaper than writing off a gym membership over the course of several years). :D
My uncle successfully wrote off his hot-tub in a similar way...he had a medical problem that required such therapy.
briarpatch
02-10-2008, 11:56
I'm not an accountant, but its my understanding that the deduction you can on an RV is for an interest deduction on the RV loan, just like you get on a home mortgage. I had a deduction like this on a sailboat loan. It was considered a second home, and therefore qualified for a home mortgage interest deduction.
Even for medical deductions, there's a 2% threshold -- ie., expenses are only deductible to the extent that they exceed 2% of your annual income (I forget whether it's annual gross or annual net income.)
Toolshed
02-10-2008, 13:10
What I have seen people do is start a side-business, such as a backpacking guide, go out and buy equipment over the next few years and then write off the cost of the gear and claim a loss on schedule C because they could not get clients. You can have a money losing proprietorship for 3 years, I believe, then you must throw in the towel. By then the value of the "assets" have likely depreciated.
Then again, is it worth a few hundred $$ to open yourself up to an audit liability?
Most folks who receive W-2s and 1099s are very easy to audit and collect from and it use to be that the IRS would invest most of their time going after them rather then than true small business owners (Proprietorships, private incorporates and subchapters, who report most or all of their income from owning small businesses).
While there might be more fraud and errors with Small Business Owners, the difficulty of proving revenue, expenses and profitability is much more tedious and time consuming for the IRS to prove, thus reducing the overall value of income for the IRS when it is acting as a revenue center.
Times may have changed as I do believe the IRS has started looking at Credit Card statements as a way to prove income on those who do not receive 1099s and W-2s.
PS I am not an Accountant, but I am an Corporate Finance MBA.
dessertrat
02-10-2008, 14:31
Hiking is a recreation and it is tax time.My accountant said an RV it is a tax write off if you use it 14 days out of a physical year.Does anyone know about hiking? Maybe all expenses are a tax write off in hiking if you hike more than 14 days also. :-?
I would love to see where the Tax Code says you can write off an RV if you use it 14 days out of the year. I can't see any reason for that, and I can't see any reason for any recreational activity being deductible.
orangebug
02-10-2008, 14:35
Like a yacht, it has a bathroom, bedroom and can serve as a second house.
I would only try to deduct hiking gear if you could somehow connect it to a profession involving hiking. Such as, assisting hikers and advertising certain hiker friendly businesses.
briarpatch
02-10-2008, 14:43
I would love to see where the Tax Code says you can write off an RV if you use it 14 days out of the year. I can't see any reason for that, and I can't see any reason for any recreational activity being deductible.
from http://www.rvfinancingdirect.com/tax_deductible.htm :
"In accordance with IRC section 163(h)(4), an RV will be considered a qualified residence if it is one of the two residences chosen by the taxpayer for purposes of deductibility in the tax year as long as it provides basic living accommodations such as sleeping space, a toilet, and cooking facilities. If the RV is chartered out, the taxpayer will have to use the RV for personal purposes for either more than 14 days or 10% of the number of days during the year the RV was actually rented, in accordance with IRC section 280A(d)(1). "
You don't write off the RV, just the normal home mortage interest deduction.
dessertrat
02-10-2008, 14:51
That's writing off the interest on the loan for it, not the whole thing.
LIhikers
02-10-2008, 16:25
Darn, does this mean I should have taken a loan to buy our '71 VW bus caamper? :)
dessertrat
02-10-2008, 16:49
I guess so!
Tennessee Viking
02-10-2008, 17:02
If you belong to one of the AT maintenance clubs, and you buy tools and supplies with your own money for the primary use of the club and AT. You can write that off.
You need to be careful about saying tools are deductible, unless you are actually donating the tools to a non-profit. Tools such as shovels or picks which you end up taking home are not usually tax-deductible as they can be used at your residence.
You may be able to write off the depreciation and possibly the maintenance on an RV if it meets the IRs's guidelines for a second or vacation home.
A good idea to run that by an accountant first.
The RV lobby couldn't be that powerful. :eek:
Am I the only one troubled by the fact that the masses are subsidizing the purchase of all those gas guzzling behemoths heading up to Maine?
Did some checking, and it appears that just the interest on a loan would be deductible.
Also, the RV must have basic sleeping, cooking and toilet facilities to qualify.
Toolshed
02-10-2008, 17:44
Darn, does this mean I should have taken a loan to buy our '71 VW bus caamper? :)
I hope no one on this board thinks it (and I think you were joking) but I have heard many times from folks both young and old, that having a mortgage is a good thing becuase of the tax deduction. I try to explain that no, if you do not need a mortgage, then don't take one out. Paying 6% interest on something so you can save approximately 1.5 - 2% of it when you do your taxes is never a good thing.
However..... Ther is an option to not taking it out - What I do tell people (and more woman than man would rather not do this, preferring to pay off their mortgage for home ownership security purposes) is that if you are not risk averse, you could leverage your home (via a mortgage) and invest in stocks or additional property.
After all, this market notwithstanding, if you can buy money at net 4.0-5.5% and earn net 8-12% on it, why not do it. In other words, if you came into money, don't pay off your low interst mortgage, but rather invest the money and keep paying your mortgage.
The Weasel
02-10-2008, 17:50
There are only a few ways that hiking could possibly be tax deductible:
1) A formal prescription - yes, on a Rx pad - from a licensed physician, directing you to engage in the activity as part of a clearly recognized medical purpose, with the activity being generally recognized in the medical community as therapeutic for the medical condition. Not as a "exercise more" but akin to physical therapy. There will be few recreational hikers who can obtain this kind of a prescription from their doctor, and even so, it is very suspicious to the IRS and may be disallowed. If so, you can appeal, but the burden will be on you.
2) If directly related to a business activity entered into with a reasonable expectation that it will generate income as a result. HIking with a goal of writing a book or article, without a showing that you are actually engaged in doing that, but 'hoping' you can, won't be enough.
3) As an "in kind" charitable contribution as part of an activity which is solely for charitablle purposes. These "contributions" are suspicious to the IRS, as well, for things like thru-hiking, so sponsorship or an agreement with a charitable body in advance would be prudent.
For more information, consult a good tax professional. Don't rely on internet research as a final or authoritative, including this.
TW
Paying 6% interest on something so you can save approximately 1.5 - 2% of it when you do your taxes is never a good thing.
Many first-time home owners discover that as a practical matter, only some (or none) of the interest they pay is tax deductible.
Because you need to give up the standard deduction.
If you drive to a Scout meeting, you get to deduct $0.505 per mile.
I see no reason why we can't all deduct a similar amount if we walk to one in the Mountains. Perhaps we can start a petition?
Blissful
02-10-2008, 18:18
We're using it as a tax write-off for me, already have an proposal on a book being marketed by my agent - I had done up a query ahead of time before my feet hit the trail.
Speer Carrier
02-10-2008, 18:23
If you belong to one of the AT maintenance clubs, and you buy tools and supplies with your own money for the primary use of the club and AT. You can write that off.
I'm not completely sure, but I believe you would have to donate the tools to the club so that the club actually owns them. The club could then just let you use them and keep them at your home.
The Weasel
02-10-2008, 18:30
If you drive to a Scout meeting, you get to deduct $0.505 per mile.
I see no reason why we can't all deduct a similar amount if we walk to one in the Mountains. Perhaps we can start a petition?
Won't work no matter how many signatures you get. Travel Scouting and other charitable groups has a charitable purpose. Hiking doesn't, other than as below.
I'm not completely sure, but I believe you would have to donate the tools to the club so that the club actually owns them. The club could then just let you use them and keep them at your home.
No, items you purchase for the principal purpose of assisting a charitable organization and which are actually principally used in that purpose are generally deductible.
TW
Please pass the word: We are not, repeat not meeting in front of Price Chopper for the petition drive. It has been canceled.
Speer Carrier
02-10-2008, 18:36
Won't work no matter how many signatures you get. Travel Scouting and other charitable groups has a charitable purpose. Hiking doesn't, other than as below.
No, items you purchase for the principal purpose of assisting a charitable organization and which are actually principally used in that purpose are generally deductible.
TW
That's good to know. I've bought quite a few tools over the years to use in trail maintenance and always thought I had to actually give them to the club to get a deduction. It won't reduce my tax liability much, but every bit helps.
The Weasel
02-10-2008, 18:36
Please pass the word: We are not, repeat not meeting in front of Price Chopper for the petition drive. It has been canceled.
Jeez. Rick. Get it right, will you? I've been out there for hours waiting for you guys. ;)
TW
Well, I don't have an RV. And our VW camper is long gone.
Does my tent qualify for tax deduction? Let's see, maybe if I bought it on plastic, and didn't pay off the plastic, then would that make the credit card interest tax deductable?
Ron Haven
02-10-2008, 21:04
Well, I don't have an RV. And our VW camper is long gone.
Does my tent qualify for tax deduction? Let's see, maybe if I bought it on plastic, and didn't pay off the plastic, then would that make the credit card interest tax deductable?I got an idea.Let me sell you my RV dirt cheep.I don't need any tax write offs in this wonderful economy we're in.
Appalachian Tater
02-10-2008, 21:08
Does my tent qualify for tax deduction? Let's see, maybe if I bought it on plastic, and didn't pay off the plastic, then would that make the credit card interest tax deductable?
Personal credit card interest has not been deductible for quite some time now, although I can remember when it was. The ending of that deduction was one of the main reasons for the increase in popularity of home equity loans.
This has been quite a fascinating thread, lots of great information.
Kirby
fiddlehead
02-10-2008, 21:56
I can see an exception to The Weasel's 3 rules i believe.
I own a company that sells backpacking equipment and clothing.
I can deduct money that i spend driving to shows, suppliers, post office, trade shows, etc.
Why can't i deduct the driving expenses (also) that i use to get to the trail to test my new products?
Toolshed
02-10-2008, 22:02
I can see an exception to The Weasel's 3 rules i believe.
I own a company that sells backpacking equipment and clothing.
I can deduct money that i spend driving to shows, suppliers, post office, trade shows, etc.
Why can't i deduct the driving expenses (also) that i use to get to the trail to test my new products?
You wouldn't need to deduct driving expenses as part of Weasels #3 item.
You have already done that to determine Net Income from Gross Revenue. - It was part of your operating expenses. You pay taxes on net income. (i.e. net of all expenses)
max patch
02-10-2008, 22:12
If you drive to a Scout meeting, you get to deduct $0.505 per mile.
No, thats business miles.
Miles driven for charitable organizations are 14 cents per mile.
After all, this market notwithstanding, if you can buy money at net 4.0-5.5% and earn net 8-12% on it, why not do it. In other words, if you came into money, don't pay off your low interst mortgage, but rather invest the money and keep paying ......
Where can you earn 8-12% net?
No, thats business miles.
Miles driven for charitable organizations are 14 cents per mile.
Ooops. Right you are.
Toolshed
02-10-2008, 22:27
Where can you earn 8-12% net?
foreign markets have been quite well up until recently. Precious metals, Mining and Luk Oil have all been very good to me the past 24 months. Before that it was Caremark, Unitedhealth and a few other healthplans. It just takes an awful lot of research and picking more than a few dogs. :D
And it is not always that high.......
Frolicking Dinosaurs
02-10-2008, 22:34
There are only a few ways that hiking could possibly be tax deductible:
1) A formal prescription - yes, on a Rx pad - from a licensed physician, directing you to engage in the activity as part of a clearly recognized medical purpose, with the activity being generally recognized in the medical community as therapeutic for the medical condition. Not as a "exercise more" but akin to physical therapy. There will be few recreational hikers who can obtain this kind of a prescription from their doctor, and even so, it is very suspicious to the IRS and may be disallowed. If so, you can appeal, but the burden will be on you.
Alway try to help out my hiking buddies
http://i16.photobucket.com/albums/b47/lowcarbscoop/Prescription.jpg
Toolshed
02-10-2008, 22:50
Aaah never mind. FD - I need one of those - "Edit quotes out of another's post" button too. :p
Alway try to help out my hiking buddies
http://i16.photobucket.com/albums/b47/lowcarbscoop/Prescription.jpg
Cookerhiker
02-11-2008, 09:27
There are only a few ways that hiking could possibly be tax deductible:....2) If directly related to a business activity entered into with a reasonable expectation that it will generate income as a result. HIking with a goal of writing a book or article, without a showing that you are actually engaged in doing that, but 'hoping' you can, won't be enough. ...For more information, consult a good tax professional. Don't rely on internet research as a final or authoritative, including this.
TW
Good advice here Weasel. Last year I attended a 2 day tax seminar (I'm a non-practicing CPA but have never practiced taxes) and one session dealing with "hobby vs. business" made this exact same point. The IRS doesn't expect you to make a profit on your "business" the first year or every year but if you continue to report expenses and a "loss" in the absence of revenue, they will clamp down.
I work with a volunteer group that needs a GPS track of the trail (not the A.T.) and we were seeking volunteers to do this. We suggested that they consult their tax adviser regarding mileage as a charitable contribution for this as well as for other aspects of trail work.
The Weasel
02-11-2008, 10:17
I can see an exception to The Weasel's 3 rules i believe.
I own a company that sells backpacking equipment and clothing.
I can deduct money that i spend driving to shows, suppliers, post office, trade shows, etc.
Why can't i deduct the driving expenses (also) that i use to get to the trail to test my new products?
Not an exception. All of those are reasonable and ordinary business expenses for your business.
TW
Another possible deduction, IF you own a company with others and IF the shareholders of that company decided to hold its annual meeting during the course of the hike. SOME of the expenses asociated with getting to and from the hike as well as accomodation costs (if you had to pay for a hostel or something) could be deductible. Lots of specific issues would have to be met.