Real Estate Broker’s Deduction for Flight Lessons Fails to Take Flight in Tax Court

A real estate broker’s attempt at deducting the cost of flight lessons as a business expense crashed and burned in Tax Court on Tuesday.

The broker, from Louisiana, evaluates properties and creates sales materials to present to potential buyers. Part of his evaluation process involves taking aerial pictures of the property. Up through 2007, he would charter a plane and pay a pilot to fly while he took pictures.

In late 2007 the broker decided he wanted to fly the plane himself, so he started taking flight lessons and he deducted the cost of those lessons as a business expense. The cost of education expenses, such as flight lessons, is deductible as a business expense if it maintains or improves skills needed in the taxpayer’s business.

The IRS disallowed the deduction on the grounds that the flight lessons were personal expenses. The Tax Court agreed. While the flight lessons were helpful to his business, they were not essential to his business. From the Court ruling:

Admittedly, evaluating properties from the air and placing aerial photographs in marketing brochures may be helpful to petitioner’s business. However, in 2005, 2006, and 2007, petitioner was able to evaluate properties and acquire aerial photographs without piloting a plane. Petitioner presented no evidence to explain why flying lessons were now required in order for him to view properties or obtain aerial photographs. Although the correlation need not be precise, petitioner has failed to persuade us that a direct or proximate relationship exists between the flight lessons he received and the skills required to be a commercial realtor.

Click here for a link to the Court ruling.

Image: Tim Beach /