Business write off's

[NinjaMax]

So, those of you who are non-diesel performance related business owners this question is for you..

what is a good/bad idea for a business expense? i have ordered new headlights and taillights already but for good reason..

advertising upgrades? i wont go into detail...but if i wanted to run a truck an bandimere speedway next year to advertise...does that make upgrades an option? i see a lot of trucks with "john doe's concrete" in a fully built truck during the summer..opinions? is that a thing?

If the truck that won the dyno got good exposure...is that not a legit reason?

have i been drinking..? not sure why thats important....

and...go

 

[DangerousDuramax]

You can use your truck as an advertising expense but your CPA will need to take a look at just how much can be written off. The laws are constantly changing so only they can tell you how much you can and cant claim. If you use the truck for more than 50% business use then you need to start writing off tires, fuel, and check whether its feasible for you to take the mileage deductions. A certain percentage of the interest you pay on the note can be written off as well. There's lots of "if's" and "how much" involved so its really best to talk with a CPA about it. What's ok for how another business owner uses their vehicle may not be ok for you. And btw...be careful on the headlights/taillights because yes its a maintenance item but replacing with non-stock lights can be a red flag to the IRS because you're not a performance based business using the truck for that purpose. You state laws may come into play there.

 

[N2BRK]

the easiest test is if the venture is in line with your business, and if there is an expectation of profit. You may be able to make small deductions but not the whole venture. For example, your company can foot the bill for the entrance fee for a drag race where folks will see your logo on the truck, but trying to spin that into paying for a trans, engine, turbo... etc. Fack no! LOL

 

[bfmine]

But trans turbo and other related parts can be truck "repairs". Nobody needs to know if it was broken or not

 

[N2BRK]

no. A repair is something fairly minor. A trans or a turbo would be an improvement. Look up TPR; Tangible Property Regulations. The IRS has clarified their position on what is a repair and what is an improvement, and how to handle each situation; eg depreciate over time or expense.

 

[bmc1025]

But trans turbo and other related parts can be truck "repairs". Nobody needs to know if it was broken or not

My thoughts exactly...

I keep my trucks almost forever, repairs are inevitable, it may not need it now but it will in the future.

Repairing and bulletproofing before problems arise is just good planning. If your truck is down for a couple weeks during the busy season you will have a much larger expense when you include the rental of a truck along with the repair.

 

[DangerousDuramax]

no. A repair is something fairly minor. A trans or a turbo would be an improvement. Look up TPR; Tangible Property Regulations. The IRS has clarified their position on what is a repair and what is an improvement, and how to handle each situation; eg depreciate over time or expense.

What he said. Unless you're in a performance based business to display your services anything above usual market value for a standard production vehicle part and its flagged as an "excessive" or "personal" expense not a "maintenance" item. When the IRS see's $8K for a transmission replacement it will automatically generate an inquiry and tag for audit. He's using his truck for standard business travel and advertising so the highly upgraded parts will be a no no unless its displaying performance services and company ability.

 

[bmc1025]

no. A repair is something fairly minor. A trans or a turbo would be an improvement. Look up TPR; Tangible Property Regulations. The IRS has clarified their position on what is a repair and what is an improvement, and how to handle each situation; eg depreciate over time or expense.

You are 100% correct if we are talking Semis but I don't have a clue when talking about 1 ton and 3/4 ton trucks.

What is the class life expectancy of our trucks in landscape and snow removal businesses?

 

[N2BRK]

the class life is important for depreciation, but you have to look at this like the IRS does... they see a rebuilt engine or a new trans as a Capital Expenditure because you have increased it's lifespan and its value; you prolonged its useful life. Repairs are just to bring something back to its operating state; broken taillight, routine maintenance, fix an oil leak, etc.

 

[bmc1025]

the class life is important for depreciation, but you have to look at this like the IRS does... they see a rebuilt engine or a new trans as a Capital Expenditure because you have increased it's lifespan and its value; you prolonged its useful life. Repairs are just to bring something back to its operating state; broken taillight, routine maintenance, fix an oil leak, etc.

I just wish that worked as well for resale value of our trucks as it does over the road trucks. My 300,000 mile LBZ will still be worth the same new motor/trany or original. That's why I don't agree with it being an investment.

 

[N2BRK]

well, the IRS sees that as a restoration of a unit of property by replacing the engine/tranny in that LBZ. I didn't say it was my opinion :hug:

 

[bmc1025]

Oh I understand It's just something that gets under my skin. :thumb: