Vehicle Wrap

[Judysam]

The owner of an auto repair shop has his logo displayed on his personal use vehicle. His vehicle is only used for commuting. If he pays for a graphic design company to provide a full vehicle wrap on this vehicle, is he allowed a depreciation deduction? Does a full vehicle wrap allow you to treat an otherwise personal auto as a business asset - because you use it for advertising?

[solomon]

Does a full vehicle wrap allow you to treat an otherwise personal auto as a business asset - because you use it for advertising?

No. However, the advertising itself would be deductible. IRC §162.

[veritas]

The owner

won't accept the answer no.

His buddies or the graphic design company has already told him it's ok.

[erchess]

I wonder

If he drove the vehicle around areas where either the streets were full of cars or there were a lot of pedestrians or just people in their yards who would see the car, and if he scrupulously did not stop other than as required by the traffic laws, did not get out of the car or accomplish anything that benefited him personally, could he not deduct either the actual costs as advertising expense or deduct the mileage assuming that he kept good records? I would agree that in practice the IRS will cast a jaundiced eye at this unless the taxpayer can prove that the driving being deducted had no personal benefits and no benefits at all other than the advertising.

There is actually a business in Texas that is owned and operated by a former Psychologist and a former Psychiatrist that operates a fleet of pickup trucks that do nothing except drive around Houston while decorated with signs advertising businesses. Ads range in size from a foot wide and inches tall to covering one side of a truck. There are other companies in other places including Asheville NC that put advertising on panel trucks or on trucks made to carry sheets of glass and drive around in order to expose the paid ads.. What I am saying is that the idea of this "advertising vehicle" is not novel.

[solomon]

If he drove the vehicle around areas where either the streets were full of cars or there were a lot of pedestrians or just people in their yards who would see the car, and if he scrupulously did not stop other than as required by the traffic laws, did not get out of the car or accomplish anything that benefited him personally, could he not deduct either the actual costs as advertising expense or deduct the mileage assuming that he kept good records? I would agree that in practice the IRS will cast a jaundiced eye at this unless the taxpayer can prove that the driving being deducted had no personal benefits and no benefits at all other than the advertising.

There is actually a business in Texas that is owned and operated by a former Psychologist and a former Psychiatrist that operates a fleet of pickup trucks that do nothing except drive around Houston while decorated with signs advertising businesses. Ads range in size from a foot wide and inches tall to covering one side of a truck. There are other companies in other places including Asheville NC that put advertising on panel trucks or on trucks made to carry sheets of glass and drive around in order to expose the paid ads.. What I am saying is that the idea of this "advertising vehicle" is not novel.

Under those circumstances, perhaps. Nevertheless, the OP states it is used for commuting only.

[WhiteOleander]

The owner of an auto repair shop has his logo displayed on his personal use vehicle. His vehicle is only used for commuting. If he pays for a graphic design company to provide a full vehicle wrap on this vehicle, is he allowed a depreciation deduction? Does a full vehicle wrap allow you to treat an otherwise personal auto as a business asset - because you use it for advertising?

This sounds like a question from an exam or test. Or maybe some kind of Cont. Ed course.

[veritas]

Naw

This sounds like a question from an exam or test. Or maybe some kind of Cont. Ed course.

I'm pretty sure it's a barbershop opinion.

[David1980]

The cost of wrapping the vehicle would certainly be deductible. I am betting you could argue that the cost of paying for car washes that otherwise would not be done (so say you wash it weekly now at $10/wash instead of every 3 months) could be a deduction.

But only the increase in costs due to the advertising should be deductible IMO. Otherwise everyone could just slap a bumper sticker on their car for the company they work for and claim all of their commuting expenses as an unreimbursed employee business expense. Right?

[Snaggletooth]

No Commuting

Good post David, but the portion of any otherwise deductible vehicle cost that relates to commuting is not deductible. Regardless if the guy is president of General Motors.

[David1980]

but the portion of any otherwise deductible vehicle cost that relates to commuting is not deductible. Regardless if the guy is president of General Motors.

Is that not what I said?

[New York Enrolled Agent]

won't accept the answer no.

His buddies or the graphic design company has already told him it's ok.

Show him page 177 of Publication 17 - advertising display on car.

[Burke]

. What I am saying is that the idea of this "advertising vehicle" is not novel.

No, it's gotten popular with real estate agents too. There is one in my town that is a panel truck whose only purpose is advertising. That new LED High Def kind which you are seeing on more and more billboards. The only thing inside the truck is about $30,000 worth of electonic gear to run the ads.

[Judysam]

Thanks

Thanks for your opinions. I couldn't find anything that would make any of the vehicle costs deductible; but, I agree the advertising would be deductible.

[DaveO]

Not qualified

won't accept the answer no.

His buddies or the graphic design company has already told him it's ok.

I think it has been well established on this board that only barbers and the brother in law of the guy who cuts the grass at the high school are qualified to give tax advice.