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Old 09-05-2020, 07:37 AM   #1
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IRS Flat Rate for use of motorcoach for "business"

Just wondering if anyone out there may ever have heard of a IRS flat rate for use of a motorcoach for business.... Not sure even what to ask for, however, there is a standard rate for the use of an car for business (X amount per mile which includes gasoline, tire wear, depreciation etc. etc. ). Is there something comparable as a similar flat fee for the use of a coach in a similar situation.

I am contemplating some minor use of my coach in such a fashion and was wondering if there is an accepted figure out there that the IRS or other agencies recognize for a class A coach such as an Entegra?

Gary
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Old 09-05-2020, 08:19 AM   #2
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The way I understand it is that you treat it the same as a car, with a flat rate per mile. You add up the total miles driven per year and then take the actual miles used for business use and calculate the percentage used for business compared to the total miles. You can then add up your expenses for the year, which include insurance, service work, repairs and operating expenses and multiply your business percentage previously calculated against the total costs as your deductible amount. If you use this method you cannot deduct the actual invoice costs of fuel, etc used on a business trip however so you must choose which method works best for your situation. If you have a lot of expenses in a given year, such as tires, windshields, etc it can be beneficial to cram in as many business miles as possible while keeping personal travel to a minimum. However, we buy these things to travel, not save money, so that's not so easy to do.
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Old 09-05-2020, 08:25 AM   #3
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Thanks for that information Mark... very helpful. No overall flat rate, but a cost versus percentage use calculation.... I was hoping for a flat rate, but I understand your process.

Maybe an additional question... since the coach is your means of transportation but it is also your lodging and meals, and lodging can be a huge expense depending on location, have you ever seen that factored in, or is it just like the cost of tires, repairs, etc. ??

Gary
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Old 09-05-2020, 08:26 AM   #4
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Gary, this may help as a start.

rl]https://tax-queen.com/taxes-when-renting-out-your-rv/[/url]

Pat

Edit, After rereading your post I see your not planning on renting. My bad. Still might be of interest to some.
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Old 09-05-2020, 08:46 AM   #5
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Remember that the advice you get on the internet is worth exactly what you pay for it. You best advice will come from you own tax accountant.

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Old 09-05-2020, 09:27 AM   #6
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You can use the standard mileage allowance of 57.5 cents per mile the RV is used for business travel. Campground fees would be treated the same as hotel fees. Meals fall under many different rules, but the general rule is they are 50% deductible.
If you mix personal or vacation travel in with your business travel you are treading water a long way from shore. I am not an expert in taxation by any means, but if you are on a cross country vacation trip and claimed segments of that trip as business travel you might find those deductions will be disallowed since it is likely the IRS would consider the entire trip as a single event and determine that business travel was not the primary purpose. But even worse, you would have given the IRS Auditor a clear reason to do more than a cursory examination of your return. Instead you will likely get the proctology exam without anesthesia version of an audit. Only you can decide if the tax savings is worth the risk. From my point of view, a thousand miles of deduction is $575.00. Even in the highest tax bracket of 37%, that only saves you $212.75 in tax. It wouldn't be worth it to me unless my documentation of any travel in a recreational vehicle being 100% business travel was iron clad.
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Old 09-05-2020, 10:04 AM   #7
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The 57.5 cents per mile figure is intended for an AUTO, not an RV. It would be far too small a number to compensate for the costs of most motorhomes. I don't see how a single flat rate mileage figure could apply to both a class B motorhome and a Prevost, where the costs and expenses vary so widely.

I think you would be have much greater deduction by calculating the actual expenses (including depreciation) and apply the percentage of business use to that figure.
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Old 09-05-2020, 02:04 PM   #8
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Gary,

You can use the standard rate or the actual expenses, however, once you use one of the two methods you are locked into that method. Using actual expenses would give you a bigger deduction, but it would also invite a challenge from the IRS.

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Old 09-05-2020, 06:04 PM   #9
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I appreciate all the information.... very helpful. I will give this all more thought. When I saw the 57.5 figure for autos, and realized how much that underestimates all the costs of a class A motorcoach, I realized that the calculation of actual costs would lead to a substantially larger deduction. Again, thanks for all the information.

Gary
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Old 09-05-2020, 06:28 PM   #10
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We own a rental house in CA and drove out and parked in the driveway for six months. Our accountant wanted to know the actual travel costs (campgrounds, fuel, meals, misc) and the distance in miles of the drive both ways. She then used the value that provided the higher deduction. Since our MH is considered a second house we can deduct the interest costs per year from income.



If you're going to be using your MH as a primary residence for business then the percentage of the MH dedicated to conducting that business would be deductible and like was stated earlier, as a percentage of the actual costs. I would guess this would be following the same rules as home use for a business.

We spent those six months working from the RV and had a rental truck for local transportation. Actual food expenses were recorded and were likewise deducted as a IRS stated percentage of cost. If you have non business expenses you would not be required to report those costs but it would be wise to retain those records separately to verify that personal costs were not co-mingled with business costs. Keep a daily logbook of what you did, who you met with, and what money you spend along with receipts. After six months we had over 370 receipts from start to finish. The secret was to keep a hard copy of everything and arrange them in the order needed by your accountant. Good Luck.



The itemized categories for business were in Schedule C.
Auto / Miles
Auto Actual Exp (Gas, etc)
Advertising
Cleaning / Main
Insurance
Legal / Prof Fees
Mortg Interest
Rent
Vehicle& Fuel Supplies
Hardware/screens
Taxes
Travel Meals
Deductible Utilities
Gardening
Permits
Pest Control
Painting
Plumbing
Electrical
Repairs / Minor Equipment
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Old 09-05-2020, 06:37 PM   #11
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There is no standard mileage rate for RV travel. Let me reiterate, THERE IS NO STANDARD MILEAGE RATE FOR RV TRAVEL. For those of you who say there is please quote me the code section of Title 26 USC. The expenses attributable to the business use of any mode of transportation other than an automobile, light truck or van is the actual cost of such transportation (section 61 IRC). This situation is further complicated by the fact that most folks are living in their RV when they travel in it. Now having said that, you need to read this: https://www.thetaxbook.com/updates/T..._Use_of_RV.pdf
and this: https://tax-queen.com/6-questions-ab...ife-and-taxes/

And download a copy of this: https://www.irs.gov/publications/p46...blink100033935 and study it.



In order for your RV to be claimed as a business the business use of it needs to be regular and exclusive. This test is done on a day by day basis. Probably no RV owner who travels in his RV could meet this test.

I realize there are owners that will say "I've been doing it for years and I never had a problem". I don't doubt that, they have also probably never been audited and thus they have won the audit lottery.



Remember this advice is worth exactly what you have paid for it. Take it for what it is worth.


This is not intended as tax advice, it is merely meant to point folks in the right direction when it comes to business deductions for their RV.
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Old 09-06-2020, 05:54 AM   #12
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There are several court cases that apply to taking the deduction for the use of an RV for business. One was a couple who sold insurance. A major portion of their business was RV insurance. They would take their coach to various rallies and RV functions where they would set up shop to sell the RV insurance. They deducted the RV costs as a business expense. They lost in court because of exactly what was quoted above, exclusive use. They did establish a business purpose but could not establish an exclusivity use.

The second case was one where the taxpayer deducted a portion of his RV as an “office in home” for that portion of the coach in which he had his office. The court said that his use as an office was not exclusively used as an office so his deduction got thrown out. I believe his “office” was in a hallway so it was not exclusively an office.

We have had several instances where we have taken the RV expenses totally as a business deduction. The first one was during the fracking boom. We had several clients who were assigned to wells that were literally in the middle of nowhere. There were no hotels, motels or other suitable temporary housing. They used their fifth wheels as their temporary living quarters. They did not use the units at all for personal use. I should add that we were not challenged on this, but I do think we would have stood a very good chance of winning on either an audit or an Appeals case.

When it comes to taking a deduction for RV expenses you have to establish a sound business purpose and you have to meet the requirements of the law. It is not easy and it is a big target on an audit. Following the old adage that pigs get fat and hogs get slaughtered is good advice. Being a little piggy can be fine but being a big old hog can get you a one way trip to the IRS’s version of the slaughter house.

Ed
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Old 09-17-2020, 08:33 AM   #13
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Don't see why you couldn't simply rent the coach to your business and calculate the depreciation and use cost as a line item expense applied to marketing or any other approriate account class .
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Old 09-17-2020, 08:43 AM   #14
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Quote:
Originally Posted by Tegra View Post
Don't see why you couldn't simply rent the coach to your business and calculate the depreciation and use cost as a line item expense applied to marketing or any other approriate account class .
But wouldn't the rental income off set any deduction claim on top of the administrative costs of documenting the activity?
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