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Cancel flight and drive instead, business purpose

Taxpayer is self-employed. TP booked a flight to a conference for people in his profession, with educational workshops, etc. TP later learned that friends or relatives wanted him to instead drive with a trailer to haul items from the conference city back to his home city. So TP didn't take the flight (nonrefundable on Southwest Air), and a year later the ticket expired unusable.

My instinct is that TP took one trip, and can deduct only the expenses for one trip, especially because the change in plans was personally motivated, and not for a business reason. Therefore TP can't deduct the unused air ticket, only the mileage (or actual expenses) of driving, excluding the short side trip to pick up the friends' items for the trailer.

But what if the change in plans was for a business reason? For example, TP wanted to give a presentation at the conference, but was allowed to register only as an attendee. Conference organizers changed their minds after he booked his flight, but TP needed to haul a lot of equipment for his presentation, so he drove instead. What then?

Thanks, Lee

Reply to
Lee Choquette
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At first I thought that the unused airfare is deductible as it was incurred as part of the business. But then again, while it is "ordinary" to take air trips, it is not "necessary" here because another method was used.

Of course, you cannot deduct: the side trip as you mention, rental if any for the trailer. And if using actual expenses then you ought to reduce the amounts because when you are hauling a trailer you get worse gas mileage and thus spend more on gas -- but I have no idea how to do this.

I think the unused airfare is deductible, as well as the cost of the driving. This is all "ordinary and necessary" because they changed the rules on him in the middle.

Reply to
removeps-groups

Thanks for your reply. I would have no idea how to adjust the gas mileage either (assuming TP takes a trailer with him rather than a one-way rental). Since any adjustment will necessarily be an estimate, would the IRS accept it anyway?

Of course, in every return I have prepared over the years, taking mileage has always been more favorable to the taxpayer than actual expenses, even if the taxpayer actually had all the records for actual expenses, which many don't. (I have not prepared returns for taxpayers who are not allowed to deduct mileage, e.g. fleets of 5+ cars.)

Lee

Reply to
Lee Choquette

There is no adjustment to the standard mileage rate for pulling a trailer. Either use the standard rate or actual costs. Note that if the TP has already used actual costs for that vehicle and took any acceleration of cost recovery (including MACRS), then the standard rate is not available.

Reply to
Bill Brown

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