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26 September 2008

Re: [taxchat] Corporate and Personal Vehicle

On a Sch C - the answer is YES.  Its asked for on page 2 Sch C.
 
 
----- Original Message -----
From: Marc Enzi
Sent: 09/26/2008 10:41 AM
Subject: Re: [taxchat] Corporate and Personal Vehicle

I appreciate the responses.  My question is this, when a client elects depreciation using straight line 5 years, is there any requirement to produce mileage data if the client insists the truck is used only by the business?

Thanks,

Marc


-----Original Message-----
From: Terri Ryman
Sent: Sep 25, 2008 5:12 PM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Corporate and Personal Vehicle



Marc, there is a check box that says that the client has mileage...and that it is written.  With the new preparer penalties, I am insisting that my clients give me a mileage log, or no deduction.  I REALLY like being an EA.  Don't intend to lose it for any client.
 
Terri L. Ryman, EA
SOUTHWEST TAX & ACCOUNTING
503 Morton, Box 1367
Elkhart, KS  67950-1367
 
620.697.2422 Phone
 
620.697.4757 Fax
 
 
 
----- Original Message -----
From: Marc Enzi
Sent: Thursday, September 25, 2008 3:41 PM
Subject: Re: [taxchat] Corporate and Personal Vehicle

I am not compromising anything, simply asking for the treatment of a proposed client transaction.

Are you saying I must insist the client provide mileage if he wants to take depreciation?

I have already advised the client to take mileage, and attempted to reconstruct but, but the client won't provide anything usable under the Cohan rule and he continues to assert he used the vehicle 100% for the LLC and insists on depreciation. I intend to disclose the treatment on form 8275 and call it a day.

Thank you for your answer, and your opinion of me.

Good day,

Marc

-----Original Message-----
From: "Arnold M. Socol"
Sent: Sep 25, 2008 3:10 PM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Corporate and Personal Vehicle



There is a line on Sch C for rent or lease. No Sch E. Deducting this will not stand up to an audit if there is no documentation including "refrigerator mileage".  Do not compromise your integrity.  It seems like you are.
 
Arnie
 
 
----- Original Message -----
From: Marc Enzi
Sent: 09/25/2008 3:59 PM
Subject: Re: [taxchat] Corporate and Personal Vehicle

Thanks for the answer Arnie, but mileage is off the table according to the client. Lets change this from a vehicle to a refrigerator.

My question is

Can the client depreciate the personally owned asset on his personal tax return?

Do I place this depreciation on schedule C or Schedule E?

Can the client do this at all, i.e. rent a personal asset to his own single member LLC and take a deduction on the LLC side for rental payments to himself?

Thanks,

Marc

-----Original Message-----
From: "Arnold M. Socol"
Sent: Sep 25, 2008 2:36 PM
To: taxchat@yahoogroups.com
Subject: Re: [taxchat] Corporate and Personal Vehicle



I would not rent - I would use mileage, even 100% mileage.  Client has to estimate the mileage, no shortcuts.  I save a small supply of daily/weekly planners just for these times, and have the client recreate in the planner, either now or when audited.  Have him check maintenance records, which would have mileage listed.  Its the clients tax return, and if he gives written details that all miles are business and an estimate of how many, I have to accept that. You can show as rent but IRS is still looking for the mileage, so forget rent.  As I have said a number of times before, I educate the client so that each next time they do the record keeping right....and they get that you are advising them correctly and professionally and most hopefully appreciate that and you even more. Therefore this time they have to pay you more to make it as right for them as possible since they did not do their homework properly.
 
Arnie
 
----- Original Message -----
From: Marc Enzi
Sent: 09/25/2008 3:24 PM
Subject: Re: [taxchat] Corporate and Personal Vehicle

Here goes:

A client did not keep mileage logs for 2004, he is having me prepare his 1120 and his 1040.

He says he wants to rent the vehicle to the LLC for the amount of his monthly vehicle loan payment of $580.

He asserts the vehicle was 100% LLC business use, but he did not transfer the vehicle to the LLC, he wants it to be a rental, and he asserts he kept no mileage logs.

Sooo, is there any problem with the single member LLC renting the vehicle and flowing the rental payment over to him?

I think this although a personal property vehicle rental  would be a schedule C, am I correct? or is this a Schedule E activity.

If the client is getting a K-1, can he get the rental payment on the K-1, or does it need to be on a 1099-MISC?

Can the client depreciate the personally owned vehicle on his personal tax return?

Do I place this depreciation on schedule C or Schedule E?

Can the client do this at all, i.e. rent a personal asset to his own single member LLC and take a deduction on the LLC side for rental payments to himself?

Thanks for any insight.

 

Marc

 

 

 

 



 


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IRS Circular 230 Disclosure: Unless expressly stated otherwise in this transmission, any tax advice contained herein, forwarded with or attached to this message was not and is not intended to be used, nor may it be relied upon or used, by any taxpayer for the purpose of (1) the avoidance of any tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions, or (2) promoting, marketing or recommending to another party any tax transaction or tax-related matters that may be addressed herein.



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