My father-in-law has asked my wife and I to take over management of 3 out of state rental properties. The properties are held by a revocable trust. My wife and I do not receive any money for managing the property. We need to travel to do annual inspections of the properties. Would the travel expenses be deductible?

ANSWER

The BIDaWIZ Team's Answer:

Normally, these expenses would be deductible as an offset to the rental income. However, since you are not paid any management fee and/or receive income for your services, it would not be deductible. This is considered a personal expense. This is detailed in IRS publication 527. We would recommend that your father-in-law reimburse you for your travel.