Trucking Co. buys camper/temporary lodging?

[sbra]

Question: is the depreciation of a camper by the Entity considered a reasonable and necessary expense in the Trucking Industry?

Trucking company (family partnership/LLC!!) purchased a 35K camper to use as temporary lodging when their truckers are working out of a terminal that is out of town. This is a small company, one driver is family and they have one leased employee. This would be for the employer's convenience, but the terminals are not their property and drivers do not have duplicate living expenses. Has anyone had experience with this type of arrangement? My gut and all that I have read says, audit nightmare. Looking forward to your comments.

[Roland Slugg]

You can't be serious.

[Bees Knees]

You can't be serious.

Why not? I think it is a good question. People often live in temporary housing while performing some type of work.

In my opinion, they are transient workers. TTB, page 8-11 says:

Transient workers. If a taxpayer does not have a regular place of
business and does not have a regular place to live, the taxpayer
is considered a transient worker, and the tax home is wherever
there is work. No travel expenses can be deducted because the
taxpayer is never considered to be traveling away from the tax
home.

The original post says there are no duplicate living expenses while the worker lives in the camper. That makes the worker a transient worker. No travel expenses allowed.

[clr]

What

is the question?

[Gretel]

This is the way I understand the post.

The truck driver may or may not have permanent housing. If they do not see Bees post. If they do some more questions need to be answered to determine if they qualify for travel expenses.

Just because the lodging is provided doesn't mean they don't have duplicate living expenses. It is always more expensive to live away from your home.

[Edsel]

Not enough info

Out of an accommodating approach to ordinary and necessary business expenses, I want very much to disagree with Bees' determination that a "transient" classification applies. If one person is living in this thing all year long, then his tax home is declared to be wherever he is, and Bees would be correct.

Not sure I understood this to be the case from the original post. OP used "drivers" in the plural sense but then maybe one domiciled person in the vehicle, and no indication that the one person actually "lived" in the vehicle all the time. I say the vehicle and concomitant operating expenses is a legitimate deduction if used by different drivers at different terminals.

That's another problem. Original post did not mention more than one terminal, but why else would they purchase a movable unit??

[Roland Slugg]

So what does the trucker do? Drive his truck to the area of the new work location, then fly home, get the camper and drive it to that same location to use in lieu of a motel room? Then when the work location changes, he moves both vehicles again ... one at a time? Doesn't his truck have one of those attached bedrooms like most do these days?

I'm not buyin' it. IMO the family is looking for a way to buy an RV ... and deduct it as a business expense.

[Bees Knees]

Why does a truck driver need a home? Some live in their trucks. Maybe these guys live in their trucks for several weeks while on a run, then return to the camper for a few days until the next run.

That is how I read the original post. Otherwise, if there was another home involved, there would be duplicate living expenses while the truck driver lives in the camper.

[JohnH]

I think this client needs to have the rules explained to them very carefully so they will have a better understanding of how to provide the right answers to our questions.

[sbra]

Assume the rules for temporary lodging etc have been met.

Is the purchase and subsequent depreciation of the camper by the Entity considered a reasonable and necessary expense in the Trucking Industry?

.

[Bees Knees]

Assume the rules for temporary lodging etc have been met.

Is the purchase and subsequent depreciation of the camper by the Entity considered a reasonable and necessary expense in the Trucking Industry?

.

You are being vague with your facts. Assuming the rules for temporary lodging etc have been met, then of course it is a reasonable and necessary expense, simply for the fact that as you want us to assume, the expense qualifies as a travel expense.

If on the other hand the rules for temporary lodging etc have NOT been met, then the expense more than likely is not a reasonable and necessary expense because it is not deductible as a travel expense. It may or may not be deductible as some other kind of expense, but not as a travel expense.

Reasonable and necessary depends upon the facts and circumstances. You can't ask us the question and expect us to ignore the facts and circumstances. That is the whole point of us debating whether or not it qualifies as travel expenses or not.

My original post centered in on your statement that there are no duplicate living expenses. That is a big deal. How can the rules for temporary lodging etc be met if there are no duplicate living expenses? That is a key element in determining temporary vs. indefinite living accommodations.

[sbra]

Thank you for your help. This is my first experience using the message board and I was not as clear as I should have been. The "temporary lodging" should not have been brought into my question.

In researching court cases etc. I could not find any information where a trucking company used a camper, period.

I was attempting to ask a general question, as to whether a trucking company owning a camper for lodging was common practice and if anyone had worked with or was aware of the use of a camper by a trucking company.

[Gretel]

Don't give up on us our yourself. Sometimes it's very hard to ask the question so others understand your problem. Not giving enough information surely leads to a lot of misunderstandings.

[sbra]

I appreciate that. Thanks.

[Bees Knees]

There are two scenarios that I can think of that would make a camper, set up at a temporary location out of town, qualify as an ordinary and necessary expense.

1) The location qualifies as out of town travel expenses for the employees. In other words, if the employees could deduct out of town travel in that location, then the employer providing the lodging can deduct the cost of the camper. The employer is paying an expense that would be deductible by the employee, if the employee incurred the cost.

That is the reason why we need to know whether or not the drivers would qualify to deduct travel expenses at that location.

2) Assume the location does not qualify as out of town travel. Maybe because the employees are transient workers. In that case, the employer could deduct the cost of the lodging if the employer included the benefit in the employees wage. Thus, the cost of the camper is ordinary and necessary because it is a taxable fringe benefit to the employees.

Again, it all hinges on the facts and circumstances of the issue. Just about anything becomes an ordinary and necessary expense of the employer if the employer includes it as a taxable fringe benefit to for the employee.