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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My preference would be an accountable plan but if that is not possible then UPE is the only option. At any rate business use @100% MUST be justified and you can only do that with mileage logs unless the vehicle is not suitable for personal use!Originally posted by Super Mom View PostTaxes 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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Vehicle is not owned by the LLC based on what you posted so they can not do depreciation.Originally posted by Super Mom View PostTaxes after all are the dues that we pay for the privileges of membership in an organized society. - FDRComment
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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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