Month: May 2026

Here’s an important tax planning opportunity—and caution—regarding the deduction of a motor home used for business purposes.

The Jackson case highlights that many taxpayers lose this deduction not because it is invalid, but because it is improperly structured or documented.

When this situation is handled correctly, a motor home can qualify as a business transportation vehicle, a lodging facility, or both, allowing for substantial tax deductions. The key is properly applying the tax rules and clearly establishing business use.

Tax law permits deductions for travel-related lodging when you are “away from home” on business, meaning your business-use motor home expenses qualify as deductions.

The financial benefits can be significant. For example, if you purchase a $300,000 motor home and use it 80 percent for business, you may be eligible for up to a $240,000 first-year deduction using bonus depreciation. Alternative methods, such as Section 179 or MACRS depreciation, can also provide, assuming 80 percent business use, up to $240,000 in deductions, either immediately or over time.

Success depends on proper execution:

• Your business use must exceed 50 percent to avoid recapture of deductions.
• You must maintain detailed records, including logs for business mileage and logs of business nights used for lodging.
• You need to document the business purpose for each trip and overnight stay.
• You establish your travel lodging tax position with Internal Revenue Code Section 280A(f)(4).

Without this documentation, deductions can be denied entirely—as seen in the Jackson case.

In summary, a motor home can be a powerful tax-saving tool when used and documented correctly.

If you want to discuss motor home deductions, please call me directly at 408-778-9651

• By Leon Clinton
• May 11, 2026

Here’s a valuable tax strategy, commonly known as the Augusta rule, that can help you generate tax-free income while claiming a legitimate business deduction.

If you own a business structured as an S corporation, a C corporation, or a partnership, you may rent your personal residence to your business for up to 14 days per year. When this is done correctly, the results are highly favorable: your business deducts the full rental expense while you personally receive the rental income tax-free.

For example, if your home rents for $1,500 per day and your business rents it for 14 days, your business can claim a $21,000 deduction. That deduction reduces business income, and in the case of an S corporation or a partnership, it reduces income that flows through to you.

On your personal tax return, you report the $21,000 as taxable income, then subtract it under the 14-day rule, so your net result is zero tax on the $21,000.

While tax law supports this strategy, proper execution is critical. You must follow several key rules, including:

• Rent for a business purpose. The rental must be for legitimate business use, such as meetings, planning sessions, or employee events.
• Avoid entertainment use. Most entertainment expenses are not deductible, so the rental should not be for entertainment purposes.
• Charge fair market rent. You must charge a reasonable rental rate supported by documentation, such as comparable market data or an appraisal.
• Document the business activities. Keep detailed records of meeting agendas, attendees, and business activities to substantiate the deduction.

Failure to meet these requirements—particularly proving fair rental value and business use—can result in the IRS disallowing the entire deduction.

If you want to discuss the Augusta rule, please call me directly at 408-778-9651.

• By Leon Clinton
• May 8, 2026

Recent tax law changes make it more challenging to receive meaningful tax benefits from charitable giving.

Under the current 2026 rules, higher standard deductions and new limitations mean many taxpayers receive little or no benefit from itemizing charitable contributions. Additionally, personal donations are made with after-tax dollars, often increasing the overall cost of giving.

But as a business owner, you can beat this problem.

Your business can structure certain payments to charities as ordinary and necessary business expenses. When structured this way, your business takes the deduction on its business return, reducing not only income taxes but also (potentially) self-employment taxes or, if applicable, payroll taxes. In addition, the business deduction generally lowers your adjusted gross income, improving eligibility for other tax benefits.

To qualify, the payment must have a clear business purpose and a reasonable expectation of financial return. In practice, this means the expense should function as advertising, promotion, or customer development.

There are several proven strategies:

• Sponsoring charitable events to promote your business
• Donating a percentage of sales to encourage customer purchases
• Supporting local organizations to enhance community branding
• Using coupons or rebate-style programs tied to charitable giving

Proper documentation is essential. To support the deduction, maintain records such as sponsorship agreements, marketing materials, and evidence of business intent.

If you want to discuss how to use your business to support charities, please call me on my direct line at 408-778-9651.

• By Leon Clinton
• May 5, 2026