Tax Deductible Ecuador Cruise

Yesterday’s message looked at how Andean products are hot this season and how to save on Ecuador shopping and even make the trip tax deductible.

You could even make part of a Galapagos cruise to Ecuador tax deductible if you are Ecuador shopping for profit.

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Haugan cruises provide discounts on Galapagos cruises specials (1) to Ecuador Living Club members.

If you are going to Ecuador for a business meeting or to take an export tour your flight, and hotel, can be tax deductible.  When you know the rules, it’s easy to deduct travel to a business meeting, even by cruise ship.  The law provides various ways to deduct cruises.  Let’s examine just one: a trip to Ecuador.

IRS Regulation 1.274-4 gives friendly rules for one-owner businesses that we can use to our benefit.  Here are some of the rules:

1)    The United States means the 50 states and the District of Columbia
2)    Transportation cost to a foreign destination for seven days or less, excluding the day of departure, is not subject to an allocation between business and personal days.

Take for example a trip to Quito for an export tour, with a Galapagos cruise included.  Quito is outside the 50 states; accordingly, it’s a foreign destination. You are subject to the foreign travel rules on your trip to the business meeting or convention in Ecuador.

You fly Miami and then onto to Quito and then onto Galapagos the Galapagos to board a cruise ship that will take a four tour of the Galapagos Islands on the Comarant, November 25 to 28. (1)

Once you arrive back in Quito on day five of your trip, you will:

1)    Check in for a two-night stay at the hotel where the Ecuador export tour is being held
2)    Attend the tour after sleeping at the hotel for the first night
3)    Depart by airplane for Miami on the day at the end of the third day on the tour

Your business tax deductions include the cost of:

1)    Travel to Miami and Galapagos
2)    Cruise ship fare in Galapagos (not to exceed tax law’s luxury boat limits that range in 2014 from a low of $566 to $680 per day, depending on the dates of travel)
3)    Food and lodging in Galapagos
4)    Airfare to Quito and Miami
5 )   Travel from Miami to home

Note that you have no personal, nondeductible expenses for this trip to Ecuador. You have to admit, tax knowledge can be fun!

Adhering the the IRS rules is vital when useing regulations of this sort.  For full details on how to learn and use tax regulation contact our tax consultant Conrad Oertweg at


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