Today TaxMama hears from Brad in North Carolina, who says, “I am an independent contractor in both the telecommunications and catastrophic insurance claims industry. Which means I travel across the country on short-term assignments of less than a year, anywhere in the US. I am a permanent resident of the State of North Carolina and maintain my tax home there.
I have been considering purchasing a self-contained motorhome/fifth wheel RV for use as lodging/office because hotels, which are both nice and affordable, are not always available. Would any part of theses purchases be tax deductible and if so where could I find the IRS Publication No# to read up on this type of deduction. ”
Hi Brad,
You may want to do some reading in the IRS publications about business travel and meals.
You can probably find some really decent used motorhomes for a good price. Many people buy them, then under-utilize them. Then, sell them off for a fraction of their purchase price.
You do not want a 5th wheel unit. Not for regular travel. You will be limited to 55 MPH on ALL highways.
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You will be subject to more driving control issues in high winds and on grades.
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You also have to be really careful how you load that vehicle so it’s properly balanced. Sometimes, you may have to add extra weight for ballast. If you have no experience with towing…this is a the most dangerous way to go.
And as it happens, my husband is a commercial driver and claims to have licenses to drive any vehicle there is – except the back seat of a fire engine. Funny, just Sunday, he was just pointing out a 5th wheel vehicle on the freeway and explaining the problems inherent in those vehicles and why he wouldn’t want one. (This, from someone who has logged over 1,000,000 miles in big, yellow busses.)
But, have you ever thought of just renting a furnished apartment? After all, whether you use a motorhome or 5th wheel, you’ll still have to pay for space rental and hook-ups if you stay anywhere for a long time.
Look at the comparative costs, including upkeep, repairs and maintenance.
But, oh, you asked about the tax issues, didn’t you.
Here is IRS Publication 463
Travel, Entertainment, Gift, and Car Expenses
https://www.irs.gov/publications/p463/index.html
The big issue you need to consider is – with all the driving you’re doing, and all the time on the road, and now, adding this portable home….do you still have a tax home at your residence?
As to the purchase itself, yes, you can deduct it as a business expense. You won’t be able to deduct the full cost all at once.
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You’ll have to spread the deductions over several years – in other words, depreciate it.
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You’ll need to do some reading in Publication 946
https://www.irs.gov/publications/p946/index.html
to see what depreciable life you’ll need to use, and what percentage to deduct.
I know, this was waaay more than you want to know.
And, remember, you’ll find answers about lots of information about tax penalties and other tax issues, free. Where? Where else? At TaxMama.com
- Ask TaxMama :: Where taxes are fun and answers are free
- IRS Publication 463 :: Travel, Entertainment, Gift, and Car Expenses
- IRS Publication 946 :: How To Depreciate Property
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