I am getting ready to buy a “new” 2019 vehicle for about $20k.

I drive about 15k miles a year for the rental business.

This vehicle will be used 100% for the business.

Am I better off buying the vehicle in my name and claiming mileage or am I better off buying the vehicle through the LLC and letting the business pay all vehicle expenses?

My old vehicle was in my personal name and I drove it for almost 300k miles. I charged the LLC a lot of mileage money with that vehicle.

Claiming the accelerated depreciation would be nice, but, the tax free mileage check each year is also nice.

Thanks

You are screwed either way? Depending on your IRS auditor.

Since I'm a real estate professional, the $25,000 write-off against $100,000 TO $150,000 income DID NOT APPLY TO ME. But since 2 IRS auditors did not know about my case, "I'm a real estate professional--spending at least 750 hours a year working on my properties that I own at least 10% interest in....they thought it meant I had a realtors license instead. Oh boy!

So to punish me, on my vehicle write offs, they disallowed 20%. They said I had to keep a millage log, showing the date, time and miles drove, not including to my house to office to pick up a work vehicle. And once at a business meeting, I had to have my tenant or client my log.

I took this to court. The Judge said I had to prove I had other vehicles to drive besides my work trucks. I showed the Judge my insurance card from one carrier. I had my 3 cars, my children's vehicles and my wife's 2 cars. I had over half a dozen cars besides my car collection and vehicle cars. But no log. So they disallowed around $7,000 in deductions.

MMIT,

So you did not buy the Rolls Royce Pickup?

I'm not an atty nor a CPA.

I like VEHICLE TRUSTS or an LLC with just vehicles.

If they were in my RE LLC, an accident could jeopardize the real estate holdings in my LLC. Vehicle lawsuits are much more common than real estate lawsuit. I don't see ads for "Were you injured in a rental house??"

"People who drive" is the #3 highest category for lawsuits after doctors and contractors.

I use MileIQ on my Iphone. $39? per year? It automatically follows my phone and logs in my mileage, time, GPS location...I labeled repeating locations such as OFFICE, LOWES, BANK...Print out at year end or any time.

BRAD

Brad,

The Rolls Royce Pickup was my first choice, but, got a 2019 grand caravan instead.

What is a vehicle trust? Is it a revocable trust?

Can I have an LLC with just the vehicle in the llc?

Thanks

A course I had many years ago said an IRS audit trap was claiming 100% use of anything for business use.

The trap goes like this, has your wife ever called and asked you to pick up milk on the way home? If the answer is yes, which is the case for most everyone, then its not 100% business use.

Your question melts down to what is better to take: bonus depreciation or mileage deduction. There are multiple factors that will go into the best answer, but if you put on 300,000 miles on your last truck - mileage seems to be a more long term path unless, the truck is already at 270,000 miles on it.

I always considered myself being on call all the time and that is why I claim all use as business.

Am I setting myself up for trouble?

If I go grab a gallon of milk for the wife I am still on the clock if a tenant calls and needs me to be there fast like.

If this means anything, I use my Porsche for errands like banking, closings, keys...legit business use.

Parts and service ain't cheap! so I claim EXPENSES, not MILEAGE because I don't put enough miles on it to cover the expenses.

BRAD

One of our LLCs own a work van and it was purchased using a Section 179 deduction as we needed the big deduction that year - actual expenses are claimed on that one. My car is both personal and work, so we use mileage on that one.

One of our LLCs own a work van and it was purchased using a Section 179 deduction as we needed the big deduction that year - actual expenses are claimed on that one. My car is both personal and work, so we use mileage on that one.