Deduction for cruise runs into rough seas


My wife, who is a licensed massage therapist, is considering signing up for an Alaskan cruise that features massage therapist training as part of its deal. If she attends the onboard training sessions, she can get a year’s worth of “Continuing Education Units” and thus maintain her certification. The package price for one person is about $2,700 for the one-week cruise, which includes the price of the training. Would this be a legitimate business expense? My tax preparer says that we can deduct the entire trip, but I just wanted to get your reaction.

P. L., via e-mail

Well, P.L., our first reaction is that you should find yourself a new tax preparer! The idea that you can deduct the full cost of a cruise while spending a small amount of time on a “training” or “seminar” type activity is, to say the least, a little aggressive. Yet, some things, like the continuing popularity of Alec Baldwin or Newt Gingrich‘s certainty that he will be on the November presidential ballot, just go on and on for no apparent reason. The simple version of the rule is: If theprimarypurpose of the travel is “business related,” the travel costs can be deducted; if theprimary purpose of the trip is personal, then none of the travel costs can be deducted. The usual way to determine if a particular trip is business or personal is the relative amount of time spent on each activity — in other words, if during your wife’s weeklong cruise, she spent more time on cruise-related activities (sightseeing, land packages, etc.) than on her therapy training, there would be no deduction for the travel and meals, but she would be able to deduct her class fee if it was separately stated. All travel and entertainment rules are covered in IRS Pub. 463.


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