Power of Attorney duties -- deductible?


P

Pete

Are the time and expenses one puts into exercising Power of Attorney
duties tax-deductible? Where is a good place to get more info on
this?
 
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A

Arthur Kamlet

Are the time and expenses one puts into exercising Power of Attorney
duties tax-deductible? Where is a good place to get more info on
this?

What would be your theory here?

Probably that these are reasonable, ordinary and necessary expenses of
your trade or business. That would make your trade or business
that of exercising a POA. And you have a reasonable expectation
of making a profit in this trade or business.


So to make a profit while deducting expenses, you would have to be
getting paid for these POA duties. If, for example, you are a
lawyer who acts as clients' attorney constantly, and bring in
income from your trade, then sure, go ahead and deduct.

If not, I would want to know your theory and see your income from
this work.
 
M

Mark Bole

Pete said:
Are the time and expenses one puts into exercising Power of Attorney
duties tax-deductible? Where is a good place to get more info on
this?
Time -- no. The value of your labor is never deductible.

Expenses? Well, would they be deductible to the person for whom you are
acting? If that person paid the expenses, or reimbursed you, then I
suppose that person might have a miscellaneous deduction on Schedule A.

To read more, a good place is IRS Publication 529, Miscellaneous
Deductions, which lists quite a few things that specifically are and
specifically are not deductible.

To build on the previous reply, the general theory is that expenses of
producing taxable income are deductible. For example, legal fees to
create a will or trust are not deductible. Legal fees specifically
itemized as tax advice regarding wills and trusts are.

Or, take a safe deposit box. If it is used to store items directly
related to taxable income, such as stock certificates, then deductible.
If it is simply used to store legal documents or other similar papers,
then not.

-Mark Bole
 
D

D. Stussy

Pete said:
Are the time and expenses one puts into exercising Power of Attorney
duties tax-deductible? Where is a good place to get more info on
this?
No. Just because one is performing the actions under a PoA, that does not
make them deductible when otherwise not deductible - i.e. the expenses have
to be deductible for some other reason.
 
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H

honda.lioness

If you are talking about financial POA, the person holding POA should
document expenses s/he pays and write out a check to him/herself for
the amount of the expenses from the checking account of the person for
whom POA is held. I would count reasonable expenses such as copying,
postage, possibly gas if the POA has to travel to see say the person's
broker from time to time.

Unless there is a contract distinct from the POA duties for payment
for labor, then like the others indicate labor cannot be charged or
deducted.
 

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