Trade or business expenses are deductible. Does this mean you can travel the world as a travel writer and deduct your expenses? You can, if you can demonstrate that you undertook your travel and writings to earn a profit, you are regularly and actively involved in the activity, and you actually commenced the activity.
Michael Oros tried it. He took a four month sabbatical from his job at Intel starting in 2006 and visited South America, Asia, Africa, and Australia. He took voluminous photographs and notes, and intended to write a book about the trip. He deducted his travel expenses as a trade or business. Unfortunately, neither the Tax Court nor the 9th Circuit Court of Appeals could accept that Mr. Oros was in the trade or business of travel writing, and his deductions were denied.
Some Favorable Facts. Mr. Oros prepared a business plan. He took thousands of pictures. He kept a detailed journal. He arranged his itinerary based on events he wanted to photograph. He had a profit motive.
The Unfavorable Facts. No prior, continuous, or repeated activity as an author. By 2011 he still had not published or completed the travel book or any other book. This was his first book. He had other full time employment. No intent to keep on writing so as to distinguish the activity from being an isolated venture for personal satisfaction.
Is not having written before fatal? The Tax Court said no, but it is not a favorable fact.
Is having another trade or business fatal? The Tax Court said no, but it is not a favorable fact.
Is not having completed the book fatal? No, but it is not a favorable fact.
There were just too many unfavorable facts. Given the right facts and circumstances, deduction of travel expenses for travel writing is workable for those actually in the business of travel writing.
Oros v. Comm., 113 AFTR 2d 2014-xxxx (CA9), 12/31/13