Discussion:Separation of travel costs and fair/show income
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Bottom Line (talk|edits) said: | 5 November 2006 |
| Client will retire next year and is considering buying an RV and selling products at various fairs and shows throughout US. Aside from Nexis considerations of income/expenses in various states and possible business license considerations, what other items should be considered? How do we separate the travel costs and depreciation on the RV (both by state and business vs personal)? They plan to work the fairs Friday - Sunday and spend the other days sightseeing and traveling to the next fair. | |
| 7 November 2006 | |
| Will they still have a primary residence other than the RV? Travel costs have to be based on traveling from their tax home, so if the RV is their primary residence travel costs becomes a problem. | |
Bottom Line (talk|edits) said: | 7 November 2006 |
| Primary residence will continue to be in Florida. They plan to travel 1-2 months at a time and return to primary residence in Florida for 2-4 months before traveling again. Will travel 4-6 months out of the year and be at primary residence 6-8 months. I know the RV can be second home but am thinking that depreciation may be better. Will probably do a corp for the business. They're also considering doing some internet sales of the products. | |
| November 7, 2006 | |
| There was a similar thread...search on RV. Don't recall how the consensus went down. In this one, I might be more aggressive about writing off the RV as travel expenses...the # of days on biz/personal might be a challenge, but you could surely count travel days to/from the next location as biz as well. So you'd have a day or two each week of pure personal, a couple days of travel maybe, and three days at each site. Assuming they really make money...this sounds like a biz to me. | |
Death&Taxes (talk|edits) said: | 7 November 2006 |
| I agree with JR, but remember auditors, especially those in the office, look enviously when the final destination is the Grand Canyon, or their kid's house. Anyone remember the 'make money showing your RV' deal of the early to mid80s? Client bought the RV, would drive it to show it to others based on leads from the company, and if that customer signed up, client had a commission. | |
| November 7, 2006 | |
You won't be able to do a search on RV as the built-in TaxAlmanac search engine only works for 'words' of 3 letters or more. You can use the Advanced Search page and search TaxAlmanac using Google to do this, however, which I did. Here are the discussions that contain RV:
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Bottom Line (talk|edits) said: | 7 November 2006 |
| Thanks a bunch! Looking at the above discussions, looks like trailer with pickup truck may be considered differently than motor home. I'm thinking actual mileage for truck and depreciation for trailer. JR1's comment regarding number of days is what I was thinking too. Their plan is to make money (can't support this lifestyle without making a profit). Fortunately they're planning ahead and doing their research. | |
| November 7, 2006 | |
| Thank you, JR1, but it's a community effort! I know the inner workings of the wiki website, but I know very little about taxation - you guys are the real experts there!
- Tim Doyle, TaxAlmanac Moderator - Talk to me 10:35, 7 November 2006 (CST) | |
Bottom Line (talk|edits) said: | 7 November 2006 |
| Oh but Tim - isn't it a learning experience :) | |
| November 7, 2006 | |
| Very much so! I've recently been digging through the depths of the IRS website, trying to discover what they might have there that would be useful to add to TaxAlmanac. Do you see anything interesting in my overview here: User:Tdoyle/Sandbox11? I never knew that I'd be learning so much about Revenue Rulings, Revenue Procedures, Treasury Regulations, etc.!
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