When Can You Write Off New Training For a Business or Real Estate Investing? | USTaxAid

Diane Kennedy's Blog

When Can You Write Off New Training For a Business or Real Estate Investing?

Written by Diane Kennedy, CPA on May 19, 2019

You’re starting a new venture, it’s common to need some training. Maybe a coach or paid mentor program is better suited for you. Whatever exactly WHAT form the training takes, it all boils down to two things: You pay some money and you hopefully learn new skills or strategies.

Are those payments deductible?

Let’s start with a common type I’m asked about lately and unfortunately, the answer isn’t good.

Can you write off training for crypto or stock investing? No. Effective with your 2018 tax return and the Trump Tax Plan, you no longer can take investment expense deductions.

The only way that it could possibly be deductible is if you are considered a mark-to-market trader. This only works for stock and bond investing, though. And it’s a tough test. In the case of cryptocurrency investing, it is not available.

Your only real option of taking a deduction for your crypto investment expenses is if you have a business. And in this case, probably the only avenue is if you start mining crypto. Otherwise, you get no deduction.

In the case of business and real estate, there are a couple of tests. Let’s break those down.

Real estate training:

You first need to be an active real estate investor. So before you invest thousands of dollars in training “how to”, buy your first property. There are plenty of good resources to help you put together a due diligence checklist. Don’t buy blind.

As far as how to structure the real estate, how to title it, whether it financially makes sense you can find out a lot of info for free by reviewing past USTaxAid.com blogs.

Or you can join the coaching program at https://www.ustaxaid.com/shop/diane-kennedys-coaching/. It’s $99/month and until you get into escrow with your first property, the coaching program isn’t deductible. But once you do, it is.

The next question is whether you actually can take a current deduction for the expense. If your AGI is under $100,000, the amount of your loss is limited to $25,000 against other income. If your AGI is over $150,000, you can’t take any deduction. Between $100K and $150K, the amount is phased out.

The exception is if you or your spouse (if you’re married filing jointly) is a real estate professional.

Business training:

The key questions with business training are:

  • Are you already in business?
  • Does this truly qualify as a business under the IRS definition?

You need to start your business to get the deduction.

Please see Friday (5/17/19) and Saturday (5/18/19) for more information on both WHY you need to qualify as a business and secondly, how to. The rules changed 1/1/2018. Make sure you’re up on the changes.

Don’t forget to visit Tax Minutes at YouTube. Take a look a few and then get caught up by clicking on a playlist to pay them sequentially. If you like what you see, and you like the idea of quick tax updates in 60 seconds or less, make sure you subscribe on the channel.

Leave a Comment


  • Three weekly emails with free tax updates
  • Exclusive deals on products and services
  • FREE Webinar: Covid-19 and Your 2020 Tax Return