Can I deduct my MBA education costs from my rental property income as a part-time landlord?
I've recently started a part-time MBA program while managing a couple rental properties I own. The program includes courses like Commercial Real Estate Finance and Small Business Accounting that seem directly related to my landlord activities. I'm wondering if I can deduct any of these education expenses against the profits I make from my rental properties? The MBA program is costing me about $38,000 in total, and I'm trying to figure out if there's any tax benefit I can claim since several courses seem directly applicable to my real estate business. Has anyone had experience deducting education costs as a landlord or real estate investor? Any insights would be super helpful!
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Madeline Blaze
You can potentially deduct educational expenses if they maintain or improve skills needed in your current business. Since you're already a landlord, and taking courses directly related to real estate and business accounting, you have a reasonable case for deducting at least the portion of your MBA that relates specifically to your rental activities. The key is that you must be already engaged in the business - which you are as a landlord. The IRS looks at whether the education maintains or improves skills needed in your current work. Courses like Commercial Real Estate and Small Business Accounting would likely qualify, but other MBA courses unrelated to property management probably wouldn't. Keep in mind you'd need to allocate the costs proportionally - only deducting the percentage of your education that directly relates to your rental business. Document everything carefully and consider working with a tax professional who understands real estate investments.
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Max Knight
•This makes sense, but how would you actually calculate what percentage of the MBA is deductible? Like if 2 out of 10 courses are real estate related, is it just 20%? And would you deduct it as a business expense on Schedule E?
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Madeline Blaze
•The percentage allocation would be based on a reasonable method - number of courses related to real estate divided by total courses is one approach. So yes, if 2 out of 10 courses directly relate to property management, a 20% allocation is reasonable. You would report the deduction on Schedule E as part of your rental property expenses, likely under "other expenses" with a clear description like "education expenses related to property management." Make sure to keep detailed records showing how the courses relate to your rental activities in case of an audit.
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Emma Swift
I ran into almost the exact same situation last year. I was taking business classes while managing my 4 rental units and wasn't sure what I could deduct. I found this online tool called taxr.ai (https://taxr.ai) that analyzes tax documents and gives customized advice. I uploaded my course descriptions and rental information, and it helped identify which portions of my education expenses were deductible. It saved me SO much time compared to the back-and-forth I was doing with my regular accountant. The tool explained exactly how to allocate the deductions between courses and provided the specific IRS guidelines that applied to my situation. Really made me feel confident about taking the deductions.
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Isabella Tucker
•How exactly does this tool work? Like do you have to give them all your tax info or just the education stuff? I'm taking some real estate certification courses myself and wondering if I can use this.
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Jayden Hill
•Sounds kinda sketchy tbh. How do you know their advice is actually legit? Has anyone actually had the IRS approve deductions based on what this tool recommends?
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Emma Swift
•You only need to upload the specific documents related to what you're asking about - so in my case, I just shared my course descriptions and basic info about my rental properties. No need to give them your whole tax return or anything personal. The advice is backed by actual tax regulations - they cite specific IRS publications and tax court cases. They're not just giving opinions. When I took their recommendations to my CPA, he agreed with their assessment and said their interpretation of the tax code was correct. It's not a replacement for a professional if your situation is really complex, but it definitely helped me understand what I could legitimately claim.
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Jayden Hill
Just wanted to update after checking out taxr.ai that u/NestEggRealtor mentioned. I was super skeptical at first (as you could probably tell from my comment), but I decided to give it a try with my real estate courses and rental property info. I was shocked at how detailed the analysis was - it broke down exactly which portions of my education were deductible and why. They even provided the exact IRS references backing up their recommendations. I ended up being able to deduct about 35% of my education costs, which was way more than I expected but still completely by the book. Definitely worth checking out if you're in this situation.
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LordCommander
If you're having trouble getting clear answers about deducting your education expenses, you might want to talk directly with the IRS. I know that sounds like a nightmare waiting on hold forever, but I used this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 15 minutes instead of the usual 2+ hour wait. You can see how it works here: https://youtu.be/_kiP6q8DX5c I had similar questions about my rental property deductions and wanted to get answers straight from the source. The IRS agent was actually super helpful and walked me through exactly what education expenses qualify and how to document them properly. Definitely worth it for the peace of mind knowing my deductions are legit.
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Lucy Lam
•Wait, how is this even possible? I thought the whole problem with the IRS was that nobody could ever get through? Is this an official IRS thing or some third party?
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Aidan Hudson
•Yeah right. So you're telling me someone found a magical way to skip the IRS phone queue that everyone else has to wait in? Sounds like you're getting scammed or they're doing something shady to jump the line.
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LordCommander
•It's not an official IRS service - it's a third-party service that uses technology to handle the hold time for you. Basically, they call the IRS and wait in the queue, then when they get a human, they connect you. You only pay if they actually get you through to a representative. No scam or shady business - they're just solving a frustrating problem. I was skeptical too until I tried it. They don't hear any of your personal conversation with the IRS agent - they just connect you and then drop off the line. After wasting an entire afternoon trying to call the IRS myself last year, this was absolutely worth it.
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Aidan Hudson
Well I feel pretty stupid now. After being totally dismissive about Claimyr in my comment yesterday, I decided to try it this morning because I've been trying to reach the IRS for weeks about an audit notice. Got connected to an agent in about 20 minutes after my own attempts never got through. The agent confirmed that educational expenses can indeed be deductible for rental property owners if they maintain or improve skills needed in your current business. They said the key is documenting how the specific courses relate to your existing rental activity. They even gave me the exact page number in Publication 535 to reference. Definitely a legitimate service - and I'm eating my words now!
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Zoe Wang
One thing to watch out for - if your MBA would qualify you for a new trade or business (like switching careers completely), the IRS might disallow the deduction. I tried to deduct my MBA when I was transitioning from property management to investment banking and got audited. Make sure your education is improving skills for your CURRENT business, not preparing you for something new.
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Tyler Lefleur
•Thanks for that warning. My goal isn't to change careers - I'm planning to expand my real estate portfolio and possibly move into commercial properties in the future. Would that still count as my "current" business or would the IRS see commercial real estate as a new trade?
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Zoe Wang
•Expanding from residential to commercial real estate would generally still be considered the same trade or business since you're still in property management and real estate investment. The IRS would likely view this as a natural progression within your current business rather than entering a new field entirely. Going from real estate into something completely different like investment banking (as in my case) is what triggers the "new trade or business" limitation. Just make sure you document your intention to expand within real estate rather than presenting it as preparation for a career change.
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Connor Richards
Has anyone used TurboTax to claim education expenses for rental property? I'm trying to figure out where to enter this and it's not obvious. The education expense section seems focused on student tax credits not business deductions.
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Grace Durand
•In TurboTax, you'd enter it under the Schedule E section for your rental property. When you get to the expenses part for each property, there's an "Other Expenses" category where you can add custom expense items. That's where I put my real estate continuing education costs last year.
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