Can Travel Time Count Towards Your Material Participation Log?

Why It Matters

Accurately logging qualifying travel protects tax benefits and reduces audit exposure for real‑estate investors and their advisors.

Key Takeaways

• Travel time may count if integral to property operations
• Courts require business necessity, not mere convenience, for inclusion
• Outdated 2005 IRS guidance conflicts with recent court rulings
• Over‑logging non‑essential hours often triggers IRS audit failures
• Similar scrutiny applies to equipment leasing, crypto mining logs

Summary

The video explains that travel time can be included in a material participation log, overturning the common belief based on a 2005 IRS memo that it was prohibited.

Recent court decisions have clarified that travel counts only when it is integral to the operation of the property, i.e., when the trip is a business‑necessary activity rather than a convenience.

The presenter cites the “business practical necessity” test, warns against “puffery of your hours,” and notes that similar scrutiny applies to creative strategies such as equipment leasing and Bitcoin mining logs.

For investors and tax advisors, correctly documenting qualifying travel can preserve passive‑activity deductions, while inflating logs with non‑essential time raises audit risk and potential penalties.

Original Description

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ABOUT JASMINE DILUCCI, JD, CPA, EA

Jasmine DiLucci has specialized in tax since high school when she first became licensed to represent taxpayers before the IRS.

Now as a tax attorney and CPA, she works with individuals and business owners across the nation to on Tax Planning, CFO Advisory, and IRS Tax Resolution

How Jasmine Got Here…

18: Became an Enrolled Agent, licensed to represent taxpayers before the IRS.

22: Earned an Accounting Degree and a Master’s in Finance.

23: Became a CPA

24: Stepped into leadership as she took over her own CPA firm

26-28: Juggled full-time studies at SMU Law while she was growing her CPA firm.

28: Graduated from law school 4th in her class and became an Attorney, all while managing her CPA firm.

29-31: Expanded her CPA firm to seven figures, with a focus on delivering top-notch service and exceptional value to every client.

32: Launched Tax Leverage to offer free online education and combat the rise of “tax gurus,” aiming to provide real, accessible tax knowledge.

Today: She’s dedicated to running her firm and leveraging her expertise to educate and empower others, helping individuals and businesses navigate the complexities of taxes and finance.

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Disclaimer: This information on this channel is for educational purposes only and does not constitute professional legal or tax advice.

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