[Tim]

Can the business lease the coach for X amount per day or mile as if I were leasing a coach from Nashville? Or do you just add up the actual expenses for the trip?

[Thomson]

From your description you are using the coach similar to how you would use the family car for a business trip which means you are entitled to treating the expenses the same way you would with your car. That is how we have used all our coaches and we have never had the deductions related to the coach even questioned in almost 25 years of claiming deductions for the coaches.

The only area you need to be concerned is if you use the coach as a business tool, whether it is used to haul a race car trailer or used as a mobile office, or even a place to conduct business. The police are now alert to folks doing that and when that is happening the police seem to be looking for the driver to have a CDL or the coach to be licensed as a commercial vehicle with all the requirements that go along with that.

[Archived]

How do you deal with fuel expenses? Is there a mileage rate for buses?

[Archived]

We might be in a little different situation because our use of the coach while strictly personal as transportation and lodging brought us to venues associated with a business related to coaches.

Our first and second coaches were used while we were developing, designing, selling, manufacturing and doing business relating to the production of a full line of equipment used by RV parks and other outdoor venues. We made everything from commercial charcoal grilles, fire rings, picnic tables, and the power outlets we all plug into.

My existing coach is used the vast majority of the time on activities relating to this web site such as at rallies and seminars. The result is we have been aggressive at deducting every penny of the cost of ownership, adjusted if required by the percentage of personal use.

[Dick]

We use our bus for business 80% of the time…everyones situation is different, definitely let your accountant provide the guidelines. Charging off a couple of tanks of Diesel isn’t worth an audit later on.

I’ve asked the same question about taking business clients out on our boat and writing off the daily expenses and related costs. Our Accountant said to be cautious as RV’s and Boats for business use are an IRS red flag.

[Archived]

I agree with David on having your accountant make the decision. In both our RV related business ventures it was / is our ownership and use of the coach that was directly associated with the business or conducting of business. Even when all we were using the coach for was as housing and transportation our deduction of expenses would be no different than if we incurred travel and lodging expenses, such as a rental car or plane tickets or hotel rooms.

Our almost exclusive use of our coaches to develop and grow related businesses however has allowed us to deduct depreciation as well as direct expenses. In years when all we used the coach for was business (almost 30 trade shows a year) every penny related to driving or owning or maintaining the coach was deducted.

Without our coaches we would never have developed the businesses so it would be very tough for the IRS to argue my accountant’s agressive posture on coach deductions.

[Michael]

I am certain the members on this site are familiar with this information….

I am not certain if this is of value to anyone but if a coach is indeed an acknowledged supportable instrument used in commerce, the record keeping can be extensive. Coaches can be used for huge numbers of different businesses….whether you are in sales or hauling horses to legitimate income creating opportunities.

I would remind the readers that the IRS is very good at what they do…

BUT… your CPA also has to know what he is doing and how these matters are to be “set up” and handled… there is absolutely nothing clandestine about the record keeping … as always, I respectfully suggest we all just want to do it correctly… and from my view do so in a very transparent manner…

A complete log of all mileage for the year must be maintained setting forth each trip, its date and the mileage at the beginning and the end of every trip. As we all know, at the end of the year, the business miles declared as a percent of the total miles driven will dictate the per cent of all expenses deducted relating to the coach.This mileage schedule must provide the trip information as well as the business purpose of the trip and persons visited, etc…. basically, the normal stuff…

A complete set of independent expenses should be maintained which include fuel, lodging, insurance, storage, up-grades, repairs and other maintenance. The depreciation schedule is dictated by rule. The cost of the coach is of course the base and the net depreciation deductions from that base will determine the carrying value of the coach on the records from year to year. If sale of the coach occurs, obviously there will be a gain or a loss to be recognized depending on the value received in relation to the current carried value at the time. The sale value must be declared and a determination made as to the gain against which ordinary taxes would be due or there will be a loss declared if the value recieved is less than the depreciated base. One way or the other, the gain or loss must be declared. The books cannot be closed out without this final calculation.

Some complicating things added to this information are the types of items acquired for the coach that are not deductable but are written off over a time period allowed (batteries are an excellent example… they are not deductable but are written off over time). This added information is important upon sale of the coach because of the effect it has on the calculation of the base against the sale’s price.

There are CPA’s on this site that can address these thoughts… I just thought they might help focus the conversation.

Pres

[Archived]

To add to Pres’s excellent post I would suggest even if you currently only use your coach for personal pleasure trips maintaining a log book will offer some benefits that far outweigh the small effort required to maintain it.

First, by tracking your mileage, places you stop to visit or for fuel, dates, gallons used or taken on, etc. you are building a history that will enable you to track things like mileage, where fuel is historically less expensive, and when you visited a certain location. Few of us are going to vary our use of the coach if fuel goes up or down in price, but if we are aware of changes in mileage, best determined over a broad period of time and miles, we can more accurately know if our coach is doing OK or developing a problem. If you think your engine needs attention the first question a mechanic will as is if the mileage has gone up or down.

But if you do maintain a log book, then when you do use your coach for business purposes you can accurately claim expenses associated with that usage. I think a lot of owners do take advantage of the coach to pursue business interests or opportunities and if you have the records you can claim every penny you are entitled to when you use the coach. Your accountant can help you with this.

[Jonathan]

Another idea is to have your business own the bus, that way all the depreciation, maintenance, fuel costs etc. are charged off to the business as the owner. You would then pay the company for your use when taking pleasure trips. We do this with our company cars and it works well and keeps the IRS happy!

Perfect record keeping is obviously important.

[Darrell]

After contemplating all the advice above, I decided to give myself a raise to cover bus expenses rather than muddy the waters with my occasional business trips. It will be much cleaner this way. Thank you all for your insight.

With respect to the business owning the bus, when I first registered the coach a few years ago, Explorer would not insure it as a business.