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NealC

Buying your RV under your business?

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I have a software business and I work a good 8+ hours a day from my RV. In a home based business you can write off the square footage of your house that's the office, obviously in the RV that's negligible. For those that are using your RV for your business what are your write-offs? Anyone bought an RV under their business? Is that smart or not? Any tips on doing so? As I will also use the RV for business travel there's that aspect. My accountant hasn't been much help in this area mainly because this has been an evolving situation but I welcome tips on those that have tied their coach to their business and in what ways. My business is an S Corp.

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Buying it in the business name requires daily mileage logs splitting out any personal use. The write off would be apportioned same as the usage. 

Get a GOOD accountant 1st.

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Do you have a personal residence in addition to the motorhome? The tax law regarding a Office in your home is that the Office area must be used exclusively for an office and no other purpose. You also can not have an office located elsewhere besides the one in your home. If you are fulltime in your motorhome these same rules would apply. It would be difficult to designate an area in a motorhome as exclusive use for an office. 

Now if you are traveling for your business, going to your clients locations, away from your home office, your travel expenses for fuel and camp ground fees MAY be deductible. Food on the road would only be partially deductible. You really need to consult with a CPA, or Tax Lawyer. Do not rely on any thing the IRS tells you. They are often wrong citing their own rules and are not held to false information given if you are audited. 

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Just now, Twotoes said:

Do you have a personal residence in addition to the motorhome?

Yes I do. It sounds really complicated. Probably best to keep the RV on the personal side. Now sure how the whole Montana LLC game plays in but that's an option too. 

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You don’t need a business to form a Montana LLC but if you do have a business you can form an LLC in any State for your business. Your bio says you are from VA so you could form an LLC in VA and have your LLC purchase the RV as a business expense and put it in your name or on your tax return. But I would still caution you to check sultan with a professional. A Tax Lawyer would be able to give you advise on taxes and LLCs 

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HERO Maker is offline at the moment, but if he saw this post I'm sure he would mention COMMERCIAL RV INSURANCE is astronomical, and premiums increase exponentially each year.  Carriers frequently decide after covering the big RVs for a year that they are going to drop them altogether, so it's always a shifting search.

***

I don't have the specifics on the numbers at the moment, but if our most recent policy premium is as I remember, it would underwrite our space rent at our current park for 13 MONTHS, not including our monthly electric bill.

 

Edited by rocksbride
additional info

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Yeah, I remember a guy buying a King Aire when I was at Newmar and he was dealing with insurance issues. Sounds like a tremendous hassle. This idea is fading fast ;)

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32 minutes ago, NealC said:

Probably best to keep the RV on the personal side. Now sure how the whole Montana LLC game plays in but that's an option too. 

If you plan to keep the RV in Virginia when not traveling you will be taking a big risk if you choose to register it in MT. If the local tax authority should notice they could very well come after the taxes you avoided in doing that as well as possible fines and penalties. 

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When we asked about writing off boat usage with the business (we would take customers out on multi-day trips), our accountant basically said he could guarantee that our cost to defend the inevitable audit would exceed the savings.  He said we could log specific costs like fuel used for a clear business trip, and food, but not the living and working space itself.

In your case it might be more clear if you're full time and work on board.  But you really do need to find someone who knows this answer specifically.  Perhaps someone from the Xscapers?  There are a lot of working liveaboards there.

 

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I would caution everybody about registering a motorhome to a business. If you are over 26,000 lbs and registered to a business then you are a commercial vehicle. That means CDL, annual physical and logbook that electronic log is a your cost,  business insurance etc. 

Bil

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On 2/19/2020 at 5:39 PM, Bill w/bus said:

I would caution everybody about registering a motorhome to a business. If you are over 26,000 lbs and registered to a business then you are a commercial vehicle. That means CDL, annual physical and logbook that electronic log is a your cost,  business insurance etc. 

Bil

That scenario is how we  bought our present MH. The first owner was Speedco, titled and licensed. The then company CEO became too sick to  pass the physical and stored it in a barn for 8 years until he consigned it to CW .  From the stickers on it, and low mileage, the only places he ever went was to NASCAR races to advertise Speedco.

Edited by Ray,IN

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A motor vehicle is not commercial simply because it is over 26K lbs. Owned by a company or not. To be commercial it must be used "in commerce".  For example, truckers use their trucks for vacation purposes or other private uses. They are not "in commerce". You just have to be clear about what you are doing. Consult an EXPERIENCED CPA.

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We have a very good friend that is a Tx DPS compliance/safety auditor of commercial vehicle operators. I asked her about this same thing awhile back. If you have an " office  " you work out of its falls under Tx & Fed commercial rules . Even she says unless you stick a sign on the rv saying what you do she probably would never catch you being non-compliant. My accountant allways advised me to never try to write off the purchase of my hobbies ( hvac business ), MH/airplane/bass boat/rv.  Some MH titles just reflect the chassis it's built around,  just saying probably more than one written off this way. 

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4 hours ago, Poohbear said:

We have a very good friend that is a Tx DPS compliance/safety auditor of commercial vehicle operators. I asked her about this same thing awhile back. If you have an " office  " you work out of its falls under Tx & Fed commercial rules .

Even she says unless you stick a sign on the rv saying what you do she probably would never catch you being non-compliant. 

If you have income from a YouTube channel, use the RV to produce the content and have the website or a logo displayed on the RV does this meet the commercial use threshold?  <g>

Edited by Lou Schneider

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33 minutes ago, Lou Schneider said:

If you have income from a YouTube channel, use the RV to produce the content and have the website or a logo displayed on the RV does this meet the commercial use threshold?  <g>

 

Yes, of course.  Same as a TV van is a commercial vehicle.  There will be a day, probably soon, that the Youtubers will have to comply with all the stuff that a TV van has to.

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7 hours ago, Lou Schneider said:

If you have income from a YouTube channel, use the RV to produce the content and have the website or a logo displayed on the RV does this meet the commercial use threshold?  <g>

Per her, if you use the rv in business and especially if you put signage on it you fall under Tx & Fed motor carrier ( commercial rules ) . It gets confusing as if you stay under 26k gvwr you don't need a CDL but will need DOT # . If operating based in Tx contact DPS compliance office and get with one of their people. Other states probably have similar .. I said earlier if you keep it to yourself that you work inside your rv,  she & her colleges probably would never know.  She is in a really good mood when we all get together and she has " caught " someone not following the rules and Austin has notified her what operator is going to owe in fines. It isn't cheap. But they are easy peezy compared to an IRS audit.

 

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On 11/14/2019 at 11:38 AM, Twotoes said:

It would be difficult to designate an area in a motorhome as exclusive use for an office. 

Difficult but not impossible. One woman I know owned a Class C in which she lived full time. She slept in the bed over the cab. She converted the back bedroom into an office complete with a door she could close. The closet was in the hallway by the bathroom with another door she could close to make that a full dressing room. In terms of space, you just have to be motivated and know what compromises you are willing to make.

Linda Sand

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11 hours ago, Kirk W said:

Stretching the limits of IRS rules is a good way to attract an audit.

My accountant referred to it as " raising a red flag ". 

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All the writing about commercial status is moot when the vehicle is involved in an accident.  Registration details are now exposed for the lawyers to see.  Expect the insurance company to walk away. 

Bill

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