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Subject:  Deductible? Or Expensed? Date:  4/6/2013  10:50 AM
Author:  TMFBreakerRob Number:  118306 of 132878

No rush on this ..... it's a 2013 tax related question. :)

I'm in the process of becoming a franchisee. The franchisor requires me to have a residence in the franchise area.

We currently have a residence in Charlotte, North Carolina and the franchise area is in Savannah, Georgia. We will continue to maintain the Charlotte residence because our daughter's family is there (including our little grandson!), but we have rented an apartment in the Savannah area and furnished it to meet the franchisor requirement and facilitate our day to day involvement in the local franchise operations.

A large amount of our day to day franchise activity can be conducted remotely from Charlotte, but we'll definitely also be in Savannah. I anticipate spending about half my time in each location. It's a 3 1/2 hour trip each way. Definitely a burden, but it seems to be well worth it.

My questions seem to be amazingly clueless to me, but that's where my knowledge is at this point. Gotta start somewhere!


1) Is the Savannah residence deductible on my personal return as a business expense? I suspect not and that the only available deduction would be partial internet expenses (for example).

2) Alternatively, even though the apartment is in our names, could the business pay the rent and utilities and retroactively pay me back for the furnishing of the apartment? Would that have to be considered income for me?

3) Can my company pay me for the travel to and from Savannah? Is this considered income for me? At this point, I just have my personal car, but imagine I'll eventually get a company car. Obviously, I'm unclear on what is considered a company expense versus a personal commuting expense and want to have an understanding now in hope that planning ahead might help.


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