Using your RV as a business expense

[cvretis]

My wife and I traveled for years going from location to location as clinical pharmacists for IHS (Indian Health Services), sort of migrant pharm workers.

We were a subchapter-s corp.

Our business owned the travel trailer and Dodge 2500 truck so we got the capital expense depreciation when it they purchased.


We paid our meals and incidental using CONUS rates.

https://www.gsa.gov/travel/plan-book/per-diem-rates

This is an amazing system in that you do not have to keep any records for meals. If you do not spend the allowed amount, you keep it tax free.

So on the Navajo Indian reservation, we could pay ourselves 66.00 per person per day.
66.00 X 2 X 365 / 12 = 4,015.00 per month. We probably spent 700 on food purchased and cooked in the RV. We had to buy in bulk as the closest Walmart was 2 hours away.

My CPA / Tax attorney checked this out and we never had any problems.

[Savage1]

Originally Posted by creativepart

It would be an audit red flag. But if you don’t care about that then OK.

As for business purchasing and depreciation... that would face much scrutiny just like the business purchase of a yacht, or a Ski condo in Aspen. The IRS has seen it all and it’s super easy to single out the folks gaming the system this blatantly.

A full audit may cost you much more than the RV.

I owned two successful businesses for over 30-years (and sold them both, too) and my wife is a CPA but our tax guy was a former IRS Agent.

One facet of this that no-one mentioned.....if you use the motorhome for commercial purposes i.e. selling products out of it, pulling a trailer to sell things out of etc. , it becomes a commercial vehicle in the eves of the DOT. CDL required, subject to DOT roadside inspections etc. And then there is the state DOT to deal with,weight laws, fuel permits. hours fo service etc.

I was going to go that route until my CPA enlightened me. You can probably get away with it but it's going to be ugly if you get caught! I didn't do it.

[jpepackman]

I really appreciate all of the responses, several items were discussed that I had not given thought to.

I'm curious how much the tax laws are going to change with this new administration. With hundreds of thousands of people working from home due to the China Virus, will the IRS be more lenient toward home office and mobile office deductions and claims?

[Ebbs]

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 IRS has ruled and the courts have backed them up that you can’t deduct an RV as a business expense since you live it in and there is no dedicated space on the RV to do your business.

[JLRanch]

I doubt that the tax laws will change in this area. The percentage of use for business & personal use has been the law for many years - probably 20 years. Many states tax you on the income you earned in that state - also been the law for many years. Put yourself in the eyes of the IRS with respect to what is reasonable. The per diem for meals and lodging by city and state has been on the books for years (very reasonable for every city. Take the per diem if it is higher than your actual meal and lodging.



Retired CPA/Consultant that spent 150 to 200 nights per year traveling for about 35 years.

[Av8Chuck]

Originally Posted by Ebbs

The IRS has ruled and the courts have backed them up that you can’t deduct an RV as a business expense since you live it in and there is no dedicated space on the RV to do your business.

I'm not a CPA but there's no dedicated business space on my airplane and the IRS doesn't have a problem deducting it as a business expense.

I'd be surprised if you couldn't deduct an RV as a business expense if its a legitimate expense.

[Steve & Bunny]

Originally Posted by Av8Chuck

I'm not a CPA but there's no dedicated business space on my airplane and the IRS doesn't have a problem deducting it as a business expense.

I'd be surprised if you couldn't deduct an RV as a business expense if its a legitimate expense.

You live in your airplane?

[Freqz]

Originally Posted by Steve & Bunny

You live in your airplane?

Airplanes are another area where owners often try to get cute with the deduction. The IRS has *very* strict rules for doing this. One advantage for airplanes is there is a bona fide way of accounting for personal use of a business asset— you issue the cost of an airline ticket (first vs coach depends on the plane and the employee using the plane) as compensation come tax time (it can be more complicated than this too depending on circumstances)

It’d be nice if a similar structure existed for us sole proprietor/LLC/S Corp types who work from our RVs most of the year but might like more than 14 days of personal use through the year.

[arcaguy]

Originally Posted by Av8Chuck

I'm not a CPA but there's no dedicated business space on my airplane and the IRS doesn't have a problem deducting it as a business expense.

I'd be surprised if you couldn't deduct an RV as a business expense if its a legitimate expense.

You don't live in your airplane, it is merely a mode of transportation. You live in an RV and that is where the rub comes in.

[JLRanch]

Correct if the RV is considered as your residence and not a 2nd home.


RV, trailers and boats that have a bathroom (head on boats), kitchen and sleeping quarter can be considered as a second home and you can deduct the interest expense based on the IRS and state guidelines. Consult with a CPA to determine the best method for the deduction when you use your RV for business.



Fixed expenses such as insurance, interest expense must be allocated based on the percentage of days used for business out of 365 days per year. You must keep a log by day that you used the RV for business. No log = no deduction. I keep a detail log of my location by day and I collect business cards to prove that I am actually on business and not on a vacation. You will need more that the RV Park receipt to proof to the IRS that you actually conducted business. Whom did you talk to or what did you sell that day. The tax laws deduction are different if the RV is your legal resident/home.



Make sure that your insurance policy has a clause for a percentage of business use or take out an umbrella policy


Retired CPA

[Winemaker2]

I'm no cpa either but have taken home office expenses for some years.
I think there are 3 potential areas for tax benefit that are getting muddied together in some posts.
IMO you need to separate and be clear what business expense you are considering.
Mileage is one consideration... should be no issue and I think it may be possible to calculate actual total and use the % for business related. Similar for volunteer work but it is a different rate. Don't know about actual.
Lodging... I would think campground fees would be OK in place of hotel (I reported marina fees to an employer when I lived on my boat at a project site. Actually saved them $ vs hotel)
Business use of home / home office... that is the difficult one and would be doubtful if it would pass muster. Several tests that need to be satisfied... used exclusively for business is the tricky one that would be hard to prove.
Re people working from home due to covid... the other reqmt for home ofc is it has to be your only place of work. I do believe if employer provides an office & phone ("work space") then you cant deduct home office AFAIK
As mentioned you will likely need to file income tax in multi states and if selling a product or service you will need to understand the various state reqmts for sales tax. Some states they can be more of a pain than income.
Get some expert advice in advance... forums OK to open your eyes but I wouldn't take any of the above "to the bank"

[Eastham]

And remember that each state that you sell in the sales tax department is going to be wanting there share.not to mention the occupation license that some county require.in some states even if you dont owe any tax if you file one day late there is a $50.00 penalty.There are a lot of shows and mkts that require liability ins .Not to discourage you just some things to think about.

[hohenwald48]

It's been my experience that if something is in fact a business expense you will generally have no problem dealing with the IRS. However, if you're looking to game the system simply to try to exploit a business expense you will likely have some "splainin to do."