Covid-related cancellations as potential tax write-offs? (United States)

[Stacey58]

Hello, 

Apologies up front if this is covered elsewhere -- I couldn't locate if that's the case!

Does anyone know if US hosts will be able to deduct Covid-related cancellations as business expenses for 2020 (and, sadly, looking like 2021 as well)? Outside of any PPP and the Airbnb Covid Relief Fund payments, has anyone seen anything specific to the hospitality industry? Hoping that Airbnb enlists Ernst & Young again to develop very general guidance....I'm a small operator so I want to avoid an accountant if I can! 🙂

[Debra300]

@Stacey58,

You pose a good question. I don't have an answer for, but am responding so the thread will move to the general discussion.

[Kia272]

@Stacey58  So restaurants could then write off the cost of all the meals that customers didn't come in and eat because of Covid? I don't think so. Same thing with the hospitality industry. Cancellations are a loss, but not a tangible loss. They cost you potential income, but not actual dollars. You can continue to write off the costs of your rental's upkeep, like utilities, etc., but not cancellations. The only positive aspect of that would be lower income, lower taxes. I know, not much of a consolation prize. 

[Emilia42]

@Stacey58 

What @Kia272 said. Little income - same expenses =  possible loss. You'll have fewer taxes to pay.

[Mike-And-Jane0]

@Stacey58 the tax system doesn't work that way in any country I have ever lived in. The advice from @Kia272  and @Stacey58 is spot on.

[Stacey58]

Thanks for the feedback, all. Will be interesting to see if there are any amendments given the situation for small businesses, although I'm not terribly hopeful Congress can get anything done. 😞