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wnytaxman · 03-25-2012, 11:53 AM

Jeff, you've got a good method also with your leasing back to your C Corp. The only downside to that scenario is that many states, such as NY, put sales tax on vehicle leases which could be a significant addition to the cost. If you get a chance, please PM me with why you are using a C corp in TN instead of an S. If memory serves me correctly there is no personal income tax in TN which would tend to make an S more attractive. I have to teach a tax seminar in Memphis this year and if there is a good TN twist I can add to the course, I'm all ears.

336muffin · 03-25-2012, 12:26 PM

I'm curious as what you sell.

Bee950 · 03-25-2012, 12:53 PM

Quote:

Originally Posted by 336muffin

I'm curious as what you sell.

Motorcycle stuff.....

Kathryn · 06-05-2012, 11:09 AM

Quote:

Originally Posted by wnytaxman

For a business to claim the expenses, it must be shown that the intent of the business is to make a profit. There is nothing in the tax code that says you MUST make a profit. That being said, constant losses greatly increase the risk of audit and the need to prove you are in business to make money.

Having the RV in a corporation would result in the business charging for personal use. Having an RV in a sole proprietorship or single member LLC would result in personal use being determined by a ratio which is usually done on a mileage basis.

I hope that helps to clarify things.

It used to be that a business had to show a profit, no matter how small, one year out of every five in order not to be classified as a hobby. Is that no longer true?

Kathryn · 06-05-2012, 11:11 AM

Never mind!

wnytaxman · 06-05-2012, 01:24 PM

Quote:

Originally Posted by Kathryn

It used to be that a business had to show a profit, no matter how small, one year out of every five in order not to be classified as a hobby. Is that no longer true?

Kathryn, even though it's off topic, I'll answer the question. There is no requirement that a business shows a profit. The IRS looks at profit as an indication that a business is being operated with the intent of making a profit. However, if it can be shown that the business is run in a businesslike fashion and that there is a clear effort to make a profit, then the IRS will be hard pressed to prove otherwise.

There is one case where a lady was a professional bowler whom the IRS challenged as the bowling being her "hobby.' She won in Court because she was able to show that one of the main reasons she stopped the bowling was because she didn't make any money doing it.

Some of the factors the IRS looks at are the level of personal pleasure received by the owner of the business, how much of the work is hired out, any outside experts that are hired, and the qualifications of the business owner. Anytime any of my clients get into something that might be determined to be a "hobby business" I tell them to make sure they document everything that they can that will show that they intended to make money.

Now we return to the original intent of this thread!

Bee950 · 06-12-2012, 10:19 AM

My business is profitable......

wnytaxman · 06-12-2012, 06:53 PM

Bee, you should be able to deduct your usage without a problem. I have several clients that are similar to you in that their RV usage is an integral part of their business. The problem users are the ones that start with an RV and then try to figure out some business use just to bury the deductions. It doesn't work that way.

TerryO · 06-12-2012, 07:03 PM

"the IRS looks at are the level of personal pleasure received by the owner of the business,"

Yikes, my business is profitable also and I receive pleasure from that, does that mean I'll in trouble with the KGB err I mean the IRS? ;-) ;-) ;-)

I have had a business that didn't make money and there's NO pleasure in that.

Bee950 · 06-12-2012, 09:01 PM

In this case, I dont do any deductions. Its owned by the LLC, and I reimburse the company when I use it for personal vacations etc.

Dogpatch · 06-12-2012, 09:13 PM

Quote:

Originally Posted by tncruiser

i tell folks i get 13mpg on my unit
6 city, 7 hiway
brianj

i like it!

wnytaxman · 06-13-2012, 01:46 PM

Quote:

Originally Posted by TerryO

"the IRS looks at are the level of personal pleasure received by the owner of the business,"

Yikes, my business is profitable also and I receive pleasure from that, does that mean I'll in trouble with the KGB err I mean the IRS? ;-) ;-) ;-)

I have had a business that didn't make money and there's NO pleasure in that.

That would be a perfect one for me to throw at an IRS auditor the next time a hobby loss issue comes up. I can just see the auditor's face on that response.

Quote:

Originally Posted by Bee950

In this case, I dont do any deductions. Its owned by the LLC, and I reimburse the company when I use it for personal vacations etc.

Bee, you have crossed the t's and dotted the i's. I could use you teaching some of my clients how to do things!