Community Forums

BobinICT · 01-04-2021, 08:35 AM

Quote:

Originally Posted by RoadEyePie

No matter if you can write it all off, I'm not going back to work.

Now THERE"S a man after my heart! Great attitude there sir.

Actually, we're considering what the OP brought up. I have an LLC for sporting goods, used mainly for firearms sales until recently. Selling off remaining inventory this year during the panic is how we bought our used TT.

I'll be discussing this thought with my accountant next month. He's very good, no fly by wire loopholes, he's a pig and not a hog kind of CPA but believes everyone's responsibility is to only pay what you are obligated and required to in taxes. No funny stuff.

I'l try to remember to report back.

Good conversation by the way.

Also, I NEVER took home office deduction over the decades because I concluded it just wasn't worth the hassle or the record keeping. And, doing so, puts one on the IRS radar. There have been some deductions I could have taken but decided against it because of the radar effect. Keep your head down and your powder dry and you should survive.

Sweetbriar · 01-04-2021, 08:43 AM

You have to be very careful and have a well educated and experienced tax advisor and preparer. Get it wrong and the costs can be painful.

Don't forget Al Capone went to jail for tax evasion not his other activities.

richard5933 · 01-04-2021, 09:00 AM

Just be careful if you plan to advertise your business on the outside of the RV, as that might create a reason for law enforcement to treat it as a commercial vehicle. It's a fine line, but I've seen some postings of people who got caught up in this mess.

groswald · 01-04-2021, 09:01 AM

So far the focus has been on tax implications, but they are not the only ones.

If you are using your coach for business then it may be, by definition, a commercial vehicle with all the attendant consequences. These may include (but probably aren't limited to) the need for a CDL, the requirement to stop at weigh stations, and compliance with all other requirements that apply to big-rigs like lane use restrictions, speed limits, etc. (assuming a DP over 26K lbs)

In addition to a good CPA you'll likely need a lawyer who specializes in this area to keep on the right side of the law.

Regards,

Randy

jpepackman · 01-04-2021, 06:46 PM

Thanks again for the information. I never thought about the implications of turning an RV into a commercial vehicle if I advertise on it or use it for a business.

Do NASCAR drivers and the owners of the big buses for rock n roll stars have the RV's registered as commercial vehicles?

richard5933 · 01-04-2021, 07:48 PM

Quote:

Originally Posted by jpepackman

Thanks again for the information. I never thought about the implications of turning an RV into a commercial vehicle if I advertise on it or use it for a business.

Do NASCAR drivers and the owners of the big buses for rock n roll stars have the RV's registered as commercial vehicles?

Yes, generally speaking they do. Same for those using an RV to haul horses to shows where they earn money.

Most of the entertainer buses are driven by professional drivers holding a CDL.

Of course there are some that don't, and every once in a while you'll hear about one getting caught and having to pay up.

arcaguy · 01-04-2021, 08:15 PM

Section 61 of the Internal Revenue Code allows "ordinary and necessary" expenses to be deducted as business expenses. With that said, you may run into issues if you full time in the motor home. Since it is your home you can only deduct the portion of your coach that is used "regularly and exclusively" for business purposes. That is a very high hurdle to get over. In the case of an RV that test would generally eliminate any deduction. Now if your use of your RV is occasional it may be a different story. I have not looked into it seriously. However I would imagine that the travel rules would apply. For instance if you go to Alaska and spend 3 days fishing and 2 days at at flea market the primary purpose of the trip would be recreational and you would not be allowed to deduct the entire trip, if any. You should go to the IRS web site get a copy of "Publication 463" and read it, at least a couple of times, then ask your tax adviser questions about any parts you don't understand. https://www.irs.gov/forms-pubs/about-publication-463 If you ever think to yourself "I could say...." you can't take that deduction. If it walks like a duck, quacks like a duck and does other things like a duck, it's a duck, it's not a demitasse goose. This is a very, very tricky area of the tax law so be very careful and document, document, document. If you are really going to go down this road get a credit card you use ONLY for RV expenses so it's easy to keep track of what you spent and keep all of the receipts, the credit card statement will not suffice. I don't play a CPA on TV but I am one in real life but it's been a couple of decades since I did any tax work so I'm not up to date. The pigs and hogs thing above is good advice and yes a "business" that does not make money 3 years out of 5 or overall is presumed to be a hobby, but it is a rebuttable presumption. If it's a hobby, its a hobby, but you can take expenses up to the amount of any income you make. As to forming an LLC it doesn't make any difference as to what is deductible, but it would likely protect you from liability. Good luck.

jpepackman · 01-05-2021, 05:38 PM

arcaguy, thanks for the information.
I will not be living in it full time, as we will still keep our house. I'm guessing I would be on the road approximately 6 months out of the year. During the time that we're not traveling, the RV would be parked. The main purpose of using the RV is to attend the flea markets and gun shows and to avoid staying in hotels and eating in restaurants...

BillJinOR · 01-05-2021, 06:03 PM

my DW has a consulting business and manages a professional organization.For peanuts I might add.
We have a home base. She deducts the travel costs miles/fuel RV space to meet members and attend conferences she sets up across the country. this includes fees especially during the event /meeting. Travel that isn't related and 90% of our nights stays aren't deducted but legit expenses are. She ''lost" a small amount of money the first 2 years but has made a small amount after expenses the past 2 .
I agree with the pig vs hog theory. Generally that income is offset and the best part, she's busy and driven. Me not so much since I retired , and keeping her busy and not planning my day has many non monetary benefits !

Gary RVRoamer · 01-05-2021, 07:31 PM

The problem with most RV business deductions is that it's also a house, so some deductions look at lot like a home-office deduction and those are subject to strict rules & limits. Actual business travel expenses like food, fuel & parking are straight-forward; deduction for cost of ownership is not UNLESS the RV is solely used by the business.

EcoRick · 01-06-2021, 03:07 PM

I have an LLC, have work throughout the United States and my wife and I are in a high risk group due to age (65 and over). I refuse to fly or stay in hotels so to conduct my business I've elected to utilize my MH as a means to get to client locations in lieu of other travel options. I reviewed this with my accountant and she was professionally skeptical but agreed that expenses related to the business use is deductible. What other option do we have? This will not be 100% deductible but the business portion will be. I have also taken home office deductions for the past 20 years as I do work out of my home. This has been audited and not questioned since the audit occurred in my home.

Calson · 01-07-2021, 02:38 PM

As mentioned you cannot deduct more than the amount of income being declared with ordinary income (different with passive and real estate and farming investments). But you can claim per diem expenses based on the cities where you stay or visit. It varies widely depending on the city and you can check the IRA allowed per diem for specifics.

We have found that we can easily travel at a lower cost than the allowed per diem and so the deduction exceeds our direct out of pocket costs which is perfectly legal.

There are also deductible expenses when starting up a business and your CPA can explain this to you. What is good is that you are investigating this now at the beginning of the tax year and not later when it will be too late.

A toad may be deductible 100% under Section 179 if the GVWR is more than 6,000 lbs. I was considering buying a Toyota Highlander until I discovered that its GVWR is exactly 6000 lbs and so would not qualify for the special tax treatment.

Many expenses that are not tax deductible for a person are deductible for a business that the same person owns and operates. What is important though is that your focus is on earning real income and minimizing risks until that income is realized. And don't go with an endeavor because it is a hobby that you want to make money with as it clouds your judgement and it becomes an emotional decision.

The easiet and safest way to earn income is to find an item being sold on Amazon at a high markup and buy the product yourself from a supplier and then let Amazon do the warehousing and credit card processing and order fulfillment. If you buy something that you can sell in volume and it costs you $20 (all costs including shipping) and you sell it on Amazon for $45 you will net as gross profit roughly $36 and have a net profit of $16 per unit sold. Your exposure will be relatively low as compared to most other enterprises and this is true in normal times and especially true with the country in a depression.

During the Great Recession that began in 2008 (atually the seeds were sown when the Glass-Stegal Act was repealed) cut our company's sales by 50% but we had no debt and no employees and only our inventory and storage costs to cover so it did not put us out of business as happened with millions of other Americans.

mg2016 · 01-07-2021, 02:55 PM

I successfully did this for a number of years. I convinced our CPA by explaining if you can have a company plane why not a company motorhome. This required the company to own the motorhome adding considerable insurance cost. I was also required to keep mileage logs with the customers I visited. Extra days and miles out of route for personal reasons were treated as a company compsation and I received a 1099 for that amount.

It can be done but it's complicated, also you may end up paying more than you think in taxes.

Mike Thomas · 01-10-2021, 08:05 PM

The legal end of this is quite complicated. If you are using this to make money, the DOT treats this like a truck for hire. You are making money with it. You will be required to get a DOT number, get a CDL, subject to all the regulations that a semi truck driver does. That means log books, fuel tax reports, and hours of service rules, and the list goes on and on. Your tax person is probably not aware of the issues involved. They are treating it like an automobile, and it is completely different. I never quote use of my motorhome as an expense. Just too many regulations, if you get caught. If you get audited by the IRS, it will not be good. They know all the rules, their rules.