House Flipping Education: A Deductible Expense?

Be careful.

There is bad news and good news with this.

Let’s start with the bad news. Real estate classes are not deductible as business expenses in 2019. You are not in the business of real estate if you take classes. Your desire to be in the business of real estate does not put you in business.
Owning land does not put you in the real estate business. Non-rented real estate doesn’t, either.
Now, let’s turn to the good news. You can benefit from the expenditures on the real estate courses if you start a real estate business in the future for which the classes were taken. Here you can look at deducting start-up expenses.

Although the cost of the classes is going to be amortized over 15 years, you save the deductions with the start-up classification.

FInal Thoughts

When you have an existing job or business and are on a path to starting a business, many of the costs you incur before you start the business are deductible and amortizable as start-up costs.

Step one on this path is to make sure you capture the costs that qualify as start-up expenses.  Don’t make the mistake of claiming the expenses as business expenses before you start the business. Bad planning can cost you all the tax deductions that you were otherwise going to get.

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