TAXES AND THE ROYAL AND ANCIENT GAME
Golf can save you money come tax time BY JESSICA LANTZ
Did you know that you might have the opportunity to write off your business-related lessons or green fees depending on their usage and frequency?
Golf lessons as a deductible expense According to IRS
publication 970, if a golf lesson maintains or im- proves skills needed in your present work it may qualify for itemization. W. Mur- ray Bradford, publisher of the Tax Reduction Letter, cites three examples where lessons for what some would describe as leisure or hobby activities impacted business opportunities and fell under the umbrella of deductible expenses. One case in point is that
of Tracey Topping, an eques- trian rider who was allowed to deduct expenses related to her horse training due to the fact that she marketed her barn and home design business through her equine prowess. Two other examples outlined deductions of fl ying lessons and pilot certifi ca- tion courses for both an air traffi c controller and a news photographer because their newly acquired skills helped improve their ability to ef- fectively operate in their line of work. Similarly, if you use your increased skills on the course in order to procure new business, gain prestige or maintain your level of play in order to compete with business associates or prospects, you too might have the opportunity to suc- cessfully claim a deduction.
Round of golf as a business expense Actual rounds of golf could also qualify as a busi- ness expense, as explained in IRS publication 463, if the outing meets certain criteria. As a general rule, golf outings do not qualify as directly related events, one of the two tests when deter- mining eligibility. However, the round might still pass the associated test for entertain-
ment purposes, which quali- fi es up to 50 percent of the expense as deductible. You must show that the
round of golf is associated with the active conduct of your trade or business, such as obtaining new business or continuing an existing business relationship. The round must also occur direct- ly before or after a substantial business discussion. The IRS code requires that you be “ac- tively engaged in the discus- sion, meeting, negotiation or other business transaction to get income or some specifi c business benefi t.”
Golf charitable
contribution deductions Many of you might
already take advantage of the deduction opportunities afforded to golfers under the charitable contributions rules as described in IRS publication 526. As an individual playing
in a charity event hosted by a qualifi ed organization, you may deduct the portion of the contribution above the fair market value of the golf. For instance, if you play in a charity tournament with a $200 entry fee and thegreen fee at the course is regularly $75, $125 of the fee could qualify as a charitable deduction. For business fi lings rather than individual, many tourna- ments can be written off as an entertainment expense.
Higher education deduction Some could also
benefi t from the tax codes related to higher education expenses, which allow a student to deduct college tuition expenses if the tuition is paid fully out of pocket, even for a course such as golf. Student loan interest is also a deductible expense, regardless of the coursework completed.
A donation to the NCGA Founda- tion is also a worthy means to reduce your tax liability. The Foundation is a fully qualifi ed IRS 501(c)(3) organization and dona- tions to it are tax deductible. A major use of donat- ed funds is to further its Youth on Course program which directly benefi ts youths who have limited ac- cess to the great game of golf by encouraging the development of life skills.
The qualifi cation of each deduction is reviewed on a case-by-case basis, so be sure to check with your preferred tax professional to ensure all of your golf benefi ts and deductions meet the current requirements of the IRS. To get resources directly from the IRS, call 1-800-829-1040 or check the information available on
IRS.gov.
SUMMER 2012 /
NCGA.ORG / 13
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