Question

Paul and Patty Nelson own a home in Nelsonville, Ohio, and maintain apartments in Lexington, Kentucky, New York City (part year), and Philadelphia (part year). Their cars are registered in Kentucky, and they have driver s licenses from Kentucky. However, the Nelsons consider Nelsonville their home because their house was inherited from Paul s parents and has been in the family for more than 150 years. During the year, Paul traveled between Kentucky and Nelsonville numerous times. Patty did not usually accompany Paul, as she works for a consulting firm on engagements in New York City and Philadelphia. The home office of her employer is in Chicago, but she never works in Illinois. Paul s sales region for his job is Kentucky and Indiana. For purposes of taking expenses while away from home, Paul and Patty use their Nelsonville home. Is this correct. Where is the Nelsons tax home?

Answer 1

ANSWER

As per the given question,

Tax home does not have to do anything with the residence of taxpayer.

A person's tax home is the city or general vicinity where his or her primary place of business or work is located, regardless of the location of the individual's residence, and has an effect on his/her tax deductions for business travel.

According to this definition of tax home, consideration of Nelsonville as their home by Paul and Patty is wrong as they do not have any work there, they just live there for some part of the year.

For Patty the tax home is Chicago as her business is located there whereas she travels for her work to New York and Philadelphia and for Paul his tax home is Kentucky

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