Using your RV as a business expense

[Steve & Bunny]

If you are involved in a crash, you better have commercial insurance if you're using the vehicle for commercial purposes. If not, most insurance is null and void. Not what you want to be subject to. Along with all the other (DOT, ICC, IRS, etc) issues.

[brialin]

I had thought about using one room as an office years ago when I had my business. CPA said not to do it. That room that you deducted now is taxed differently than the rest of the house when you sell. He also said it is a red flag for the IRS.

[rwinslow]

We full timed and worked our business out of the RV for almost 10 years (we made profits). We were audited. We were denied that % of the RV that we claimed as office space for a business expense. (Ouch) We were allowed travel expense deductions in support of our business travel, i.e. standard business expenses.

We were advised by CPA's and the IRS auditors that we should file state returns for each state we worked in (30 states in one particular year).

From very recent experience, California claims their share after one day of work in their state, even if you home residency is a state that does not have state income taxes. I have been told that Oregon is very similar in their aggressive collection efforts. Be careful.

[richard5933]

Originally Posted by rwinslow

We full timed and worked our business out of the RV for almost 10 years (we made profits). We were audited. We were denied that % of the RV that we claimed as office space for a business expense. (Ouch) We were allowed travel expense deductions in support of our business travel, i.e. standard business expenses.

We were advised by CPA's and the IRS auditors that we should file state returns for each state we worked in (30 states in one particular year).

From very recent experience, California claims their share after one day of work in their state, even if you home residency is a state that does not have state income taxes. I have been told that Oregon is very similar in their aggressive collection efforts. Be careful.

Same thing professional sports teams deal with - players have to file taxes in each state they work in.

[hoppinalong]

My CPA told me similar - that as long as costs are reasonable (e.g. what I would have paid for airfare and hotel), I can deduct mileage and campground expenses.

One thing to consider is your insurance. For example, if you go so far as depreciating your RV, then you might have to change your insurance policy to indicate it is used for business, not just personal use.

[hoppinalong]

Originally Posted by brialin

I had thought about using one room as an office years ago when I had my business. CPA said not to do it. That room that you deducted now is taxed differently than the rest of the house when you sell. He also said it is a red flag for the IRS.

The IRS now has a simple home office deduction - $5 per square foot up to 300 square feet = $1500. Has no impact on when you sell the house.

[66lima]

Originally Posted by jpepackman

I'm seeking information about using an RV as a business expense.
If you travel via your RV and go to events like art shows, gun shows, flea markets, etc. as you sell your merchandise, are you able to claim your RV expenses on your federal taxes?

I believe if I keep a journal and document my expenses as I travel across the USA (and through Canada enroute to Alaska) from flea market to flea market (or from gun show to gun show) then I can claim those expense on my taxes.

Does anyone have any experience on this subject? Can you offer any advice? I've discussed this with my CPA, she's not sure if I can claim being a traveling salesman on my taxes. Do I need to form an LLC?

Any advice on this is greatly appreciated.

I use my RV to do some volunteer work and can easily take the deduction.
I think you need a new CPA.
What are you paying her for?

Take the deduction.
IF the IRS doesn't like it they will let you know and make you pay.
They aren't gonna send you to prison over it.

[captlyn]

The first thing I would say, is my CPA told me this when I wanted to use my boat as a charter boat. Yes, you can deduct your expenses against your income. HOWEVER, BE READY FOR AN IRS AUDIT. Keep your books tight, do everything in a business like manner. When you use a boat, plane, 2nd home, RV, etc. as a 'business', you will be scrutinized, particularly if you are not showing a profit. I did. And he was right. I went through IRS audits for five years. We prevailed each time. The last went all the way to appeals. I was prepared to go all the way to tax court, to prove a point. Just know appeals costs money, and tax court would have been much even more expensive. It may not be worth the hassle.

[captlyn]

Originally Posted by jpepackman

I'm seeking information about using an RV as a business expense.
If you travel via your RV and go to events like art shows, gun shows, flea markets, etc. as you sell your merchandise, are you able to claim your RV expenses on your federal taxes?

I believe if I keep a journal and document my expenses as I travel across the USA (and through Canada enroute to Alaska) from flea market to flea market (or from gun show to gun show) then I can claim those expense on my taxes.

Does anyone have any experience on this subject? Can you offer any advice? I've discussed this with my CPA, she's not sure if I can claim being a traveling salesman on my taxes. Do I need to form an LLC?

Any advice on this is greatly appreciated.

The first thing I would say, is my CPA told me this when I wanted to use my boat as a charter boat. Yes, you can deduct your expenses against your income. HOWEVER, BE READY FOR AN IRS AUDIT. Keep your books tight, do everything in a business like manner. When you use a boat, plane, 2nd home, RV, etc. as a 'business', you will be scrutinized, particularly if you are not showing a profit. I did. And he was right. I went through IRS audits for five years. We prevailed each time. The last went all the way to appeals. I was prepared to go all the way to tax court, to prove a point. Just know appeals costs money, and tax court would have been much even more expensive. It may not be worth the hassle.

[Daveyjo439]

Originally Posted by RoadEyePie

Yes but can you purchase the RV or depreciate the RV cost as a part of the business? Not just the fuel, etc.?

I did 15 years ago. Look up a section 179 deduction if it is still active. I wrote my RV off over 5 years - not depreciated it. Worked well, but I did have revenue to cover it.

[garyb1st]

Originally Posted by Steve & Bunny

If you are involved in a crash, you better have commercial insurance if you're using the vehicle for commercial purposes. If not, most insurance is null and void. Not what you want to be subject to. Along with all the other (DOT, ICC, IRS, etc) issues.

IIRC, the only limitation on an automobile insurance policy is the exclusion that applies when a vehicle is used as a livery vehicle. So if you're using your vehicle to transport people you have a problem.

The more important insurance issues you need to address are claims arising out of general and product liability. If anyone is injured while in your vehicle for business purposes, you could be held liable. Even if you had a tent set up and someone was injured while in your tent, that's a claim a personal policy most likely will not cover. If you sell a product and the buyer is injured as a result of using that product, you have a liability that is not covered by anything other than a product liability policy.

What you really need more than the free advice from an RV Forum is a competent tax accountant and a knowledgable insurance agent. Most insurance agents today are nothing more than order takers.

[JLRanch]

You must keep very detail records – mileage by dates, persons/or businesses that you contacted at each location. You can deduct expenses that are directly related to the business trip, but not the personal part of the trip. I collect business cards for each trip.

Other expenses such as depreciation, interest on loan, general maintenance expenses should be split between business and personal use. You split these expenses based on personal vs business mileage. Your motor home is being used for both personal and business use. If you take a combined personal and business trip, you should split the total trip between them. IRS Publication 463 discusses this topic.

General guideline: If the IRS challenges your deductions, you must prove the expenses are legit for the business trip.


Retired CPA

[Bullseye]

I had a friend that leased his work vehicle to business and he seemed to be happy with it. I think renting it to business would be a possible solution.

[Freqz]

I do this. I consult in the oilfield and work ~200 nights/year (in normal years, anyways).

It’s pretty clear that my TT (to be a FW before long) is pretty well dedicated to work: I keep a spot at a “RV park” near the field (400 miles from home) which is hardly a luxury location and hotels are generally unavailable, unsatisfactory, or stupidly expensive. It and the truck are a good write off for me. . M&E deductions are generally well over what I actually spend on food and whatnot as well. The CPA and I spent a good long time discussing before he signed off on it.

Last year I used it 160 nights for work and 2 for personal. Sigh.

I agree completely with the CPAs and lawyers above that writing off an RV has the potential to be a HUGE audit flag...tread carefully.