Camper shell

[JoeW]

Client added a camper shell to vehicle to sleep in while away from home on business. He is claiming mileage for the vehicle. The camper can be removed from the vehicle. Can he depreciate the camper in addition to claiming mileage?

[Burke]

I would say no. He either takes mileage or actual expense incl depreciation.

[BOB W]

I would 179 the camper or depreciate. To me it is just like buying a plow. The plow has nothing to do with the vehicle expenses.

[Burke]

If he had bought the vehicle with the camper shell already attached, would you then isolate it and depreciate it separately, taking mileage for his business travel? That would be like separating his radio, his heated seats, and any other option not necessary to run the vehicle.

[BOB W]

If he had bought the vehicle with the camper shell already attached, would you then isolate it and depreciate it separately, taking mileage for his business travel? That would be like separating his radio, his heated seats, and any other option not necessary to run the vehicle.

I would if I was smart enough to look at the components of the purchase. Buying it separately just makes it clear that one has nothing to do with the other.

[BHoffman]

Does the camper shell have a commode? I would probably treat the camper shell as a separate asset.

[BOB W]

Does the camper shell have a commode? I would probably treat the camper shell as a separate asset.

I think the shell can out live the truck just like a plow can out live it also. If you want to break a car/truck into its componets and intend on selling or using its componets separately later like a radio, CB, supply/tool racks, hitches, etc I see no problem listing them separately off of one invoice. Knowing the value of each componet is the task.

Hey, if it can be done for buildings it should be available to any asset.

[taxea]

simple answer is yes. It was purchased separarely from the truck.

[BOB W]

OK cost segregation is only allowed on buildings or improvements over $200,000. A car or truck does not qualify to separate its componet parts.

Separately purchased add-ons are separately deductible. For those that plan ahead purchasing add-ons separately will have a tax benefit at some point for some purchasers.

[Burke]

OK cost segregation is only allowed on buildings or improvements over $200,000. A car or truck does not qualify to separate its componet parts.
Separately purchased add-ons are separately deductible. For those that plan ahead purchasing add-ons separately will have a tax benefit at some point for some purchasers.

Ok, I am willing to acquiesce if I could locate a cite. Do you have one you can direct me to? For both statements?

[BOB W]

Ok, I am willing to acquiesce if I could locate a cite. Do you have one you can direct me to? For both statements?

Here is one: I'm searching for the other............

http://www.taxprojectsgroup.com/reTaxServices.htm#CS

[Burke]

This site concerns real estate, and I have used shorter depr periods for leasehold improvements and other components of bldgs, for example. I have never seen anything regarding the $200K figure, however, and this does not mention it. That is the part I was curious about.

[Bees Knees]

IRS Pub 463, page 19 says:

Improvements. A major improvement to a
car is treated as a new item of 5-year recovery
property. It is treated as placed in service in the
year the improvement is made. It does not matter
how old the car is when the improvement is
added. Follow the same steps for depreciating
the improvement as you would for depreciating
the original cost of the car. However, you must
treat the improvement and the car as a whole
when applying the limits on the depreciation
deductions. Your car’s depreciation deduction
for the year (plus any section 179 deduction,
special depreciation allowance, and depreciation
on any improvements) cannot be more than
the depreciation limit that applies for that year.

Since the improvement is treated as a whole when applying the limits on the depreciation deduction, that means it cannot be depreciated separately in addition to the standard mileage rate if the standard deduction is taken on the vehicle.

I’m not sure cost segregation can apply to a vehicle. Cost segregation in real property applies when you identify separate assets found in a building and identify them as personal property rather than real property. For example, a central air conditioner is considered a structural component of a building and as such is treated as real property. A window air conditioner is considered a separate asset and as such is treated as personal property. Cost segregation applies because the asset is personal property and not real property and as such, has a different class life.

A vehicle is already considered personal property. Any improvement to the vehicle is also going to be considered personal property with the same class life. Cost segregation is not necessary as both the vehicle and improvement have the same class life. To use cost segregation so that you can claim depreciation on the improvement and the standard mileage rate on the vehicle seems to stretch the rules beyond their intended purpose. I would be inclined to say you can’t do that, especially since IRS Pub 463 says vehicle improvements have to be treated as a whole when considering the depreciation limits.

[JG EA]

So, then couldn't the preparer switch the vehicle to:

If the actual expense method is used in any year after
the standard mileage rate method has been used, the straightline
method of depreciation must be used. (Rev. Proc. 2004-64)

and then depreciate the shell separately?

[Bees Knees]

So, then couldn't the preparer switch the vehicle to:
and then depreciate the shell separately?

If the taxpayer switches back to the actual expense method for the vehicle and uses straight line depreciation, then the cost of the shell can be depreciated as well.