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I have a Vacation Rental By Owner (VRBO) rental in a city that the company I work for (large company - W2) requires I travel to regularly. I am authorized to use either hotels or VRBO/AirB&B rentals when I travel.

Is there any financial / tax reason NOT to stay at my own VRBO rental? Any negative I'm not thinking of?

I have not told them it's mine, and I see no reason to as it's owned under my company name / not myself directly and managed solely (along with other rentals) by my spouse. I only plan to rent it to them when: 1) I can rent it to them cheaper than a local hotel and 2) it's already vacant.

Mark Henderson
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maplemale
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2 Answers2

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Your biggest problem is that this may be seen as a conflict of interest - in other words there is potential for you to make decisions about company money that benefit you, rather than the company. Fortunately it's not a very big problem, handled rightly.

In order to prevent any possibility that this might be a problem, I recommend that you:

  1. Go and tell whoever approves your travel expenses about the arrangement. Be up front that the place you are staying is yours. (That it is technically run by your wife will make no difference.) You might need to come with evidence that you aren't overcharging, i.e. rates of other places you might stay, but they probably know the rates in this city pretty well. However note that they will be comparing prices at other places you might reasonably stay, not necessarily places with the same facilities.
  2. Get a written statement that they are OK with the arrangement, and that they are OK with the price you are charging. If you really are cheaper than the local hotels they will probably be OK with it. Getting their agreement removes any possibility that you are trying to do something shady.

People have been fired for trying to rip off their companies through deals like this, but if you are up front about everything and aren't overcharging there shouldn't be a problem. And this is likely not a big enough amount of money to be a real problem anyway.

I don't see any tax issues in this. However check with the company that there might not be some more tax efficient way of doing things.

DJClayworth
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I am assuming United States based on the mention of W2.

It will depend on what documentation the company requires. Generally they will either require a receipt, or they will give you a rate based on IRS regulation or government per diem for that city.

I know that in the past one of my employers gave a set percentage of the per diem, in exchange for no receipts. This allowed you to stay with a friend or relative. The money wasn't taxable.

If the company doesn't require a receipt then you are probably OK. But I would make sure they knew about the ownership issue.

The tax issue could get interesting. If you stayed in the unit without paying that would count against personal use limits. If you use the money to pay the rental fee, the money will be income for the unit.

mhoran_psprep
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