I want to say we often took a point. You mentioned family vacation and it’s an item that I get a lot of in the, what are some mistakes people make in the business space? It’s the V the wanting to write off the occasions. I have people that say, Hey, I went to Disneyland with the family but I want to run it off cause my wife works with me and while we waiting in line, we talked about business stuff. You’re not going to win on that in an audit. I have people going, Hey I went to Hawaii and I looked for rental properties. I would get a couple of business cards for amazing Trust Attorney Las Vegas. Can I write up the whole trip? No. The way the tax code works is if you go, you have to take the percentage that you’re specifically doing work. Like maybe you looked at some rental houses for a couple of hours to the total hours of the rest of the trip and that’s the percentage you get.
It’s going to be a very, very small percentage. You’re not going to get very much for it. Um, that being said, if you’re doing a trip, let’s say to where, um, you have some family and it’s not one of these destinations that’s known as a vacation destination and you are going to do some, uh, either networking for, uh, the type of industry that you’re in or even just real estate. I’m going to look at some properties there. Maybe it’s a rental property and you and you get some contacts that you have a proof for that. That is a space where you can make some deductions that offer Trust Attorney Las Vegas. And again, it’s looking at these things you’re naturally spending on which ones can I deduct the space that’s going to get you in trouble. The ones that are classic vacation destinations, the IRS agent doesn’t even have to look it up.
Anaheim, they know is Disneyland. Like they know that. So those you can’t get away with, but some of the other ones in the other space, um, if it’s an unknown location, maybe it’s just where you have family from, you’re going to go visit. Try to see if there are ways you can turn that into a trip. Some people have continuing education and they can do them in different locations. Maybe do a continuing education class in that location. And now you can write off some of the airfare or even just the gas travel expenses you have in getting there with amazing Trust Attorney Las Vegas.
Yup. I think that’s, that’s a very good point there. All right, we’re gonna make a little bit of a transition here. So we talked about best practices. Now let’s talk about, um, the standpoint of if someone dies. You know this is very pertinent to me and my clients. Um, so somebody dies. What are the tax implications? Cause we’ve talked, you know, on the podcast multiple times about what to do from the trust standpoint and or probate, but what does it look like from the tax standpoint and when somebody dies?
Uh, I get a lot of people that come in all the time and they’re panicked. These are people that have filed taxes for years with solid Trust Attorney Las Vegas. They’ve seen taxes a bunch of times, but somebody passes away and all of a sudden they’re like, it’s gotta be something crazy and different. Um, I’m telling you what it’s not, is it is filing a final return for that individual. I must know the date of death cause we put it in and if you might, maybe you don’t have a trusted advisor, they might make a mistake in this space, but the IRS looks for return every year for you until you file one that tells them that, Hey, here’s the date of death and at that point, they Mark it in the system that there’s no further return and they’re not going to look for it when you have a final return.
We’re just going to take the tax docs that we got for that individual for the year. We’re going to file a final return. There will be somebody that has to sign off for them somewhere and this is where I go back to Blake again. There should be somebody that already in the trust or the state of the will that’s designated as this individual gives you amazing Trust Attorney Las Vegas. They’ll have paperwork that authorizes them to do it. We have them sign on the tax return and we send it in just like a typical return. It can be electronically filed. The process is simple. I would say the most critical thing is knowing who’s allowed to sign and frankly having that decided beforehand, do that work before it happens because it’s way easier if we already have the docs and I just go get the signature and we’re done. Um, and also that, um, the date of death has to be put in.
Make sure that that gets on the tax return. Again, I don’t, I don’t mind if you don’t use, you meet and you go somewhere else, but I want you to have the right result. Make sure that that date is put in because otherwise, you’ll get an in a further year and all of a sudden you get some IRS notice and you’ll be like, man, this is two years later I thought everything was done and now they’re asking me some questions or maybe some tax document and now I have to answer some more questions and I didn’t know what the answer is and I’m two years removed for great Trust Attorney Las Vegas. File the final return properly and it makes that all go away.
Gotcha. Awesome. Now, this is something I see all the time. Clients want to get around having to set up a trust or anything when they transition assets to their kids. And so they’ll say, Oh, I’m just going to give the house to them right now cause I’m sick. I know I’m going to die in the next month. Why is that a bad idea from a tax standpoint,
again, not in the realm that I filed these, but you can’t just move money to your children. There is what they call a gift tax and there’s a limit on it and the limit is low and people do this all the time. They’re trying to give away hundreds of thousands. They should only be able to give away like tens of thousands. So when you’re giving away large assets and they’re like, Oh, this is simple, I just moved it, now I’m safe.