Discussion:Investment Advisor and Car Dealer
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Discussion Forum Index --> Tax Questions --> Investment Advisor and Car Dealer
Will "the tax guy" (talk|edits) said: | 22 March 2007 |
| I have a client who is an investment advisor and receives a 1099 and files a Schedule C, however he is also a car dealer.
Where the questions come is that the vehicles he drives for business and personal are also the vechicles he is trying to sell. He has given me a list of the vehicles he drove in 2006 the purchase price of each and the sale price of each (if they have been sold) and expenses such as car washes, repairs, gas, and advertising. Should I set up an asset worksheet for each vehicle under his Dealer Schedule C or put the purchase price of the cars in COGS and list the sales as income and combine the other expenses as business expenses? Also on his Investment Advisor Schedule C. Do I have to list each of the vehicles he drove during the year or can I do one Vehicle worksheet and list his mileage? Since he is selling the vehicles he is not going depreciate the vehicles. Can anyone help? | |
| 23 March 2007 | |
| Since he is a car dealer he should show the purchase price as COGS and list the sales as income and show exp as business expenses.
On the Investment advisor Sch C showing one vehicle and listing his business mileage will be an easier and practical solution. Business mileage will be at the same rate and I don't think he is driving trucks. | |
| 23 March 2007 | |
| (I wonder if he is keeping his gas receipts for the used car business separate from the ones he is claiming standard mileage rate for his investment advisor business?) | |
Will "the tax guy" (talk|edits) said: | 23 March 2007 |
| Do I need to take into account his personal mileage on these vehicles? How do car dealers usually handle personal mileage on vehicles they drive? | |
| 23 March 2007 | |
| It's not the car dealership he wants to deduct mileage for, it's the IA business. I'm sure whatever gas he buys for his used cars for sale is being deducted as a sales expense. | |
Will "the tax guy" (talk|edits) said: | 23 March 2007 |
| He hasn't given me any figures for gas. Even so does he not have to account for the personal mileage on vehicles? I was thinking that he would have to reduce his basis in the vehicle to account for this? | |
| 23 March 2007 | |
| There is a MSSP for car dealers. It's titled "Independent Used Car Dealers" | |
| 23 March 2007 | |
| Car dealers (independent) usually don't show the personal use, even when they let sales managers drive the vehicles....it is not part of the inventory adjustment unless it resulted in an upside down inventory adjustment on the sale of the vehicle....
Now for the IA business, how does he deduct mileage on various vehicles used? Could the dealership charge him a rental fee for the use of the vehicle and then he takes that as a cost to his IA? No matter how you look at it, it will be a wash in between the two businesses or so I assume.... | |
