Many of you have spent thousands of dollars on seminars in the past few years. One of the more common questions I get when I am speaking at a seminar or later when I am doing a tax evaluation is whether the cost of these seminars is deductible.
Like most tax questions, the answer depends on your circumstances. Some of you own a business and the seminars are likely to improve your business skills. You are the lucky ones, as your seminar expenses should be fully deductible against your business income.
Others of you are looking to start a business. Your seminar expenses probably are not currently deductible, especially given a recent decision by the Tax Court. The Tax Court held that expenses for a real estate seminar were not deductible. Instead, they were considered start up costs of the Taxpayer’s real estate business. Why? Because the Taxpayer had not begun his real estate business prior to incurring the seminar expenses.
Still others of you are trying to decide whether to start a business. If you incur seminar expenses that don’t relate to your employment and you never start a business, you probably cannot deduct the cost of the seminar at all under this new Tax Court case. Certainly, this is the position the IRS is taking.