I have a client with an LLC and 100% business use vehicle in his name. He is asking me what would be best, set up as rent (which would require a 1099 I explained), put a paper in the agreement for UPE or put an accountable plan in the agreement and use ARP. He does NOT want to keep a mileage log. Thinking he's gotta do that in any scenario, but let's be honest, a lot of people don't do that. So, I'm wondering which option would be best for him? We would use actual receipts (only the ones he has) and depreciation.
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Taxes after all are the dues that we pay for the privileges of membership in an organized society. - FDR -
With ARP can we do depreciation, etc...? The vehicle is not suitable for personal use, is a dump truck. He also has a small truck, I think he would rather lose those expenses than do a log!!!Comment
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I know they can depreciate it with UPE, right?Comment
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My two cents
My preference is also accountable plan. If this vehicle is clearly used 100% for business then it should not be a problem. Either SMR or actual including depreciation can be taken. I believe same goes for UPE.
If he can lease the vehicle to the LLC depends if this is a SMLLC or MMLLC. In any case, this income would generate a Schedule C and I do not see the benefit of doing it that way.Comment
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I agree about the leasing thing, I've had two clients recently tell me that their lawyer said that's the best thing. Not from a tax perspective!!Comment
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