Business deduction
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New Member

Business deduction

We are considering purchasing a pool franchise. If we were to install a pool at our home as a display model would we be able to write off as business expense?

3 Replies
Level 15

Business deduction

That would be a far stretch to deduct all or part of  a family pool even if you show it to clients... don't think it would stand up to an audit.  Best thing is you got a good price for the pool for yourself.    I am sure the franchise has beautiful brochures with pictures in them showing the model options. 

Level 15

Business deduction

If you really want to do this, you need to engage a professional tax person to give you advice and who will defend you at audit.

 

In addition to the usual rules that business expenses must be "ordinary" and "necessary" for the type of business, expenses that are also in the character of personal expenses are only deductible business expenses if they would not have occurred but for the business.  

 

You might argue that the pool is not personal and you never would have installed it but for the business, but that's not very believable.  You might argue that you installed top of the line accessories to show them off, and that but for the business, you would have used standard accessories, therefore the extra cost of the items is a business expense.  That might get more traction if audited.

 

Then you also have a depreciation problem.  If you build a storage barn on your land that is 100% used for a business (car repair, woodworking, storing supplies for some other business, etc.) then it can be a legitimate business expense but you usually have to depreciate it instead of deducting it as an expense.  And that affects the taxability of the eventual sale of your home, even if you would normally qualify for the capital gains exclusion.

 

So see a pro if you want to do this. 

*Answers are correct to the best of my ability at the time of posting but do not constitute legal or tax advice.*
Level 11

Business deduction

You MIGHT be able to deduct the business percentage.  Figure out the total time it is being shown to customers, versus the total time it is used for personal purposes.

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