Can I deduct my MBA classes as a business expense for my rental property income?
I've been managing a couple rental properties for about 3 years now, nothing huge just 2 duplexes. I recently enrolled in a part-time MBA program that includes some really relevant courses like Commercial Real Estate Analysis and Small Business Accounting & Finance. Since I'm running these rental properties as a business and paying taxes on the income, I'm wondering if I can deduct some of these educational expenses on my tax return? The courses seem directly related to my landlord activities and would help me manage my properties better. Has anyone successfully deducted higher education costs against their rental income? The tuition isn't cheap (about $15,000 per semester) so being able to write off even a portion would be really helpful. Thanks for any advice!
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Carmen Ortiz
This is a good question about education deductions for rental property owners. Generally, the IRS allows you to deduct ordinary and necessary expenses related to your rental activity. Education expenses can potentially qualify if they maintain or improve skills needed in your current business. For your MBA courses specifically in Commercial Real Estate and Small Business Accounting, you have a reasonable case since these directly relate to your current rental business activities. However, there's an important distinction: the education can't qualify you for a new trade or business - it must be relevant to your existing business activities. You'll want to document how these specific courses help your current rental property management, rather than preparing you for a different career. Keep detailed records connecting course content to your rental business operations.
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Andre Rousseau
•Thanks for the detailed response! One question though - would I deduct these expenses on Schedule E where I report my rental income or would it go somewhere else? And does it matter if the MBA program would give me a degree at the end or just that the specific classes are related to my current business?
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Carmen Ortiz
•You would typically deduct these education expenses on Schedule E since they're directly related to your rental property business. This keeps all your rental-related expenses together in one place. Regarding the degree, what matters most is that the education maintains or improves skills needed in your current business, not necessarily whether you get a degree. However, if the MBA as a whole would qualify you for a new profession (like investment banking), the IRS might challenge the deduction. This is why I recommend focusing on how the specific courses relate to your current rental activities rather than claiming the entire MBA program.
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Zoe Papadakis
After struggling with a similar situation last year, I found this amazing tool called taxr.ai (https://taxr.ai) that helped me figure out exactly which education expenses were deductible for my rental property business. I was taking some business courses at the local college and wasn't sure what I could write off. The tool analyzed my situation and showed me exactly which courses qualified as legitimate business expenses for my rental properties. It even helped me understand how to properly document the connection between the coursework and my existing business to satisfy potential IRS scrutiny. Saved me a ton of stress during tax season!
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Jamal Carter
•How exactly does this tool work? Does it just give general advice or does it actually help with specific course deductions? I'm in a similar situation but taking real estate investment courses online instead of a formal MBA.
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AstroAdventurer
•Sounds too good to be true honestly. Did you actually use this for an audit or just for filing? My accountant told me education deductions are audit magnets.
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Zoe Papadakis
•The tool works by analyzing your specific situation - you upload your course descriptions and information about your current business activities, and it evaluates the connection between them using tax regulations and previous tax court cases. It's not just general advice but tailored to your specific courses and business situation. I haven't been audited (thankfully), but the documentation guidance it provided gave me confidence in taking the deductions. It showed me exactly how to create a paper trail connecting each course to my existing business operations. My accountant was initially skeptical about the deductions too, but after reviewing the analysis and documentation strategy from taxr.ai, he felt much more comfortable including them on my return.
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Jamal Carter
Just wanted to follow up and say I tried taxr.ai after seeing this thread. I was skeptical because my situation was a bit different (online real estate courses rather than an MBA), but it actually gave me really specific guidance! The tool analyzed my course syllabi and connected each topic to specific landlord activities I was already doing. It even created documentation I could keep with my tax records showing exactly how each course maintained or improved skills in my existing business rather than qualifying me for something new. My tax preparer was impressed with the analysis and felt comfortable claiming the deductions for the relevant courses. Definitely worth checking out if you're trying to deduct education expenses!
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Mei Liu
If you're having trouble getting answers from the IRS about education deductions for your rental business, I highly recommend trying Claimyr (https://claimyr.com). I spent WEEKS trying to get through to an IRS agent to clarify some confusing rules about deducting education expenses related to my rental properties, but kept hitting automated systems or ridiculous wait times. I was about to give up when I found Claimyr. They actually got me connected to a real IRS agent in under 45 minutes! You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The agent I spoke with gave me clear guidance on exactly what documentation I needed to support my education expense deductions for my rental business.
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Liam O'Sullivan
•Wait, how does this actually work? The IRS phone system is notoriously impossible. Does this service just keep calling for you or something?
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AstroAdventurer
•This has to be a scam. Nobody gets through to the IRS that quickly. I've literally spent hours on hold only to get disconnected. I'll believe it when I see it.
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Mei Liu
•It uses a combination of automated technology and timing algorithms to navigate the IRS phone system efficiently. It essentially keeps trying different pathways through the phone system until it finds an available agent, then connects you directly when one is found. It's not just random calling - they've figured out the patterns and optimal times to connect. The service places the call on your behalf and then calls you when they've successfully navigated through the IRS phone system and have an agent ready to talk. You don't have to sit on hold for hours - you just answer when they call you back with an agent on the line. I was skeptical too until I tried it. It's basically like having someone who knows all the shortcuts through the IRS phone maze.
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AstroAdventurer
I have to publicly eat my words here. After being completely skeptical about Claimyr on this thread, I decided to try it as a last resort when I couldn't get an answer about education expense deductions for my vacation rental business. I tried calling the IRS myself THREE TIMES with no luck - each time on hold for 1+ hours before getting disconnected. Used Claimyr yesterday and had an actual IRS agent on the phone in 37 minutes. They called me when the agent was ready, and I got a clear answer about how to properly document and allocate my real estate education expenses between my properties. The agent even sent me to a specific IRS publication that addressed my situation perfectly. Totally worth it and definitely not a scam like I thought.
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Amara Chukwu
I'm a landlord with 6 properties and took some accounting courses last year. My CPA advised me to only deduct courses that DIRECTLY relate to property management, not general business skills. So for you, the Commercial Real Estate course might qualify, but probably not the entire MBA program. Also, make sure you're keeping detailed notes about how each specific course directly helps your CURRENT rental business. We created a spreadsheet linking course topics to actual tasks I do as a landlord. This documentation is super important if you get audited!
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Giovanni Conti
•Did your CPA have you deduct the expenses on Schedule E or somewhere else? And what percentage of your education costs were you able to deduct overall?
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Amara Chukwu
•We deducted the expenses on Schedule E, distributed proportionally across all my rental properties. My CPA recommended this approach to keep all rental-related expenses organized in one place rather than taking some education expenses elsewhere. As for percentage, we were only able to deduct about 30% of my total course costs. We carefully analyzed each course syllabus and only claimed the portions that directly related to my existing rental business activities. For example, in my accounting course, we claimed the sections on property accounting and business expense tracking, but not the corporate accounting modules.
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Fatima Al-Hashimi
My friend tried deducting his real estate courses last year and got audited! The IRS disallowed the deduction because they said his education was preparing him for a "new trade or business" since he only owned one rental property at the time. Just be careful and document everything!!
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NeonNova
•That seems excessive for the IRS to audit over education expenses. Was he claiming other questionable deductions too? I've been deducting relevant continuing education for years with no issues.
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