As an airline pilot who lives away from my tax home, can I deduct hotel expenses while at my tax home if I sleep there AND use the location to work for my LLCs?

[uptpilot]

I am a member of 3 LLCs, which I work on actively everyday of the year. They require internet access and a place to put down several computers. My LLC work requires privacy and a means to communicate with clients (Internet access, quiet place to talk).  I live in TX, work in NYC for an airline.  I would probably be paying for the hotel while I'm in NYC whether I had the LLCs or not, but it so happens the hotel room is necessary for business use as well.  Can I deduct the cost of staying at a hotel even though the only reason I'm in NYC in the first place is for my primary job of being an airline pilot?  Will the IRS say that I cannot tax deduct it because the expense of a hotel room can also be *seen* as a "commuting expense", which is not deductible?  In my case, I have overlapping dual-use of the hotel room for which the business use is probably deductible but the commuting expense would not.  What if it serves as both?

[bwa]

Your "tax home" is the area where you are principally employed.  There can only be one area where you are principally employed.  If your principal occupation that earns you the most money and takes the majority of your time is your employment as an airline pilot then NYC would be your "tax home", even though you may have a home office at your residence elsewhere. 

Because NYC would be your tax home (if those conditions are met) then the hotel costs there would not be deductible for either your business as an airline pilot, or your three llc's, as you are not away from your tax home for either.

As a basic rule, commuting between a residence and your tax home is not deductible.  In the simplest situation, that might be from your home to your office several miles away.  However, the same principle would apply if your home is in Texas and your "office" is in NYC.

Traveling from your home when you have a home office there to your work station would not be commuting in most instances. 

The statute provides that ". . . the term “principal place of business” includes a place of business which is used by the taxpayer for the administrative or management activities of any trade or business of the taxpayer if there is no other fixed location of such trade or business where the taxpayer conducts substantial administrative or management activities of such trade or business."

You could somehow come up with a theoretical argument that travel between TX and NYC was deductible based on that principle but the IRS would certainly challenge it.  You don't want my opinion on whether they would prevail as the IRS doesn't care what my opinion is.  However, you might consider applying to the IRS for a private letter ruling on your situation if the costs are substantial.

There is an interesting article in the Journal of Accountancy on applying for private letter rulings that you may find helpful.  The article is here: 

[bwa]

Your question was answered several months ago here: 

[uptpilot]

Unfortunately it was not answered.  Bwa did provide important clues but important details were not answered.  For example, he used the term "home" in relation to NYC when I don't have a "home" in NYC, I use hotels or rent space in an apartment.  I do, however, have an actual "home" in another state.  Since these critical details are not specifically addressed, the answer will change significantly.  Therefore, my question is not answered.

[uptpilot]

I forgot to mention, for clarification, it is important to note my "Home" is in TX, my "tax home" is in NYC, my LLCs have a "home office" in TX (at my actual home where I live).  I hope this helps.