A week's vacation in this pampered mountain mecca can set you back thousands of dollars. That's the bad news. The good news is that if you do it right, you can deduct your ski trip when you fill out your income tax return.
Among those who can do that were the doctors and lawyers who gathered around a television set one afternoon last week in the Geneva Room of Vail's elegant Swiss Hotel and Spa, where rates run about $350 per night. In stretch pants and ski sweaters, they had just come in from a day on the slopes. Before heading for the hot tub, they watched a one-hour educational video on "Employment Law for the Healthcare Office."
The taped lecture was designed to help the skiers improve their medical and legal skills. But it also improved their bank balances, because attending that apres-ski class brought them within the ambit of Section 162.5 of the federal income tax code, the "travel and education" write-off.
By attending classes when the lifts were closed, the students get to deduct much of the expense of their ski vacation.
According to American Educational Institute Inc., the training firm that runs the video seminars here and at 30 other ski and golf resorts around the country, those who attend its classes can write off not only the $425 tuition but also "travel, lodging and meal expenses" as long as "the primary purpose of your trip is to maintain or improve professional skills."
The Internal Revenue Service agrees, up to a point. "Professional education and associated costs are deductible," says IRS spokesman Tim Harms. "But when it comes to mixing business with pleasure, part of it is deductible and part of it is not." The extent of the deduction varies depending on the individual circumstances, Harms says.
IRS regulations on educational deductions make no distinction between taped and live classes and say nothing about the location of the courses.
This so-called "resort write-off" has long been a target of tax law critics such as Sen. Edward M. Kennedy (D-Mass.). Kennedy argued that it is "ridiculous" to allow a deduction for travel to Vail, Lake Tahoe or Palm Springs, when the taped lectures could just as easily be shown in New York, Dallas, Washington or other cities where the students live.
But recent tax law changes have had minimal impact on the seminar deduction. "I think the last amendment made things a little more specific, clarified some of the parameters," said David Victor, president of American Educational Institute. "But basically, tax reform didn't really impact us. The deduction for associated travel and expenses is still there."
Victor's company runs taped lectures almost every weekday at ski resorts such as Vail and Aspen, Park City and Jackson Hole, and at golf destinations such as Palm Springs, Boca Raton and Hilton Head. "We go where the doctors want to go," he explained. "We time our classes around lift schedules or other recreational opportunities in the venue."
American Educational has a regular week-long schedule, with classes before the lifts open and after they close Monday through Friday. Students can register and start class any day of the week, and attend as many of the lectures as they choose.
Numerous other seminar firms promote the travel-and-education write-off to potential students. The "Peds-R-Us Medical Education Company" in Chicago, for example, is offering a course called "Pediatric Medical and Traumatic Emergencies," to be held next December at Lake Tahoe. The headline of its advertisement reads "Just in Time for the Ski Season!" The firm advises potential students that "all expenses of continuing education (fees, travel, meals and lodging) undertaken to maintain and improve professional skills are tax deductible."
The courses offered here at Vail are typical of the travel seminar industry's offerings. Often, the classes are geared to continuing-education programs that are mandated by state medical and legal societies. Since the students come from different professions, the videos focus on general topics that can apply to medical, dental, legal or accounting practices -- office management, computer skills, malpractice concerns and the like.
"Some of the videos are pretty useful," said Chris Nering, a Texas internal medicine specialist who turned out before the lifts opened at Vail last week to take the class. "But yesterday, they showed us the video of a mastectomy malpractice case. I think that was more for lawyers than for an internist."
The skier-students here last week did not wish to be interviewed about their hopes for a tax deduction. But an accountant from New York, who asked not to be named, seemed to be rehearsing the argument he might make to an IRS auditor.
"You know, I signed up for evening classes at the Y[MCA] in Manhattan," he said. "And I got so busy, I never made it to class. Here, I'm away from everything, and they run the class before the lifts open in the morning. So I'm getting more education by coming to Vail than I would in New York. Do you buy that?"