So I recently purchased 2 duplexes. I manage these properties myself and they are about a half hour away from my home. These houses need a bit of fixing and i'm able to do most of the work on weekends.
Problem is, I drive a Hyundai. I'm going to buy a new truck which I'm so pumped about! First truck. Thinking a new Ram 1500 Sport. Anyway, am I able to claim that entire truck as a business expense? I have an LLC formed. I'm not a professional in real estate, just a broke teacher with 4 kids doing this on the side.
This will be a good question for your accountant. However, there are some instances where you can lease the truck to your business. However, the most common practice is to track the mileage that you use for business and deduct the mileage on your taxes. The Feds give a pretty healthy mileage deduction, and it will add up.
@Brian Zaug I was listening to the Bigger Pockets podcast today with @Amanda Han episode 49 and actually that question is asked to her. Its a little bit of an older episode so you may want to speak to a CPA to see if anything has changed since then. But the answer was that you can't write off the full amount of equipment (trucks, cars, HVAC, etc. ) in one year anymore, only a percentage each year I guess.
@Brian Zaug When you're starting to ask questions that have thousands of dollars of repercussions it's time to talk to or find a good CPA with REI experience. It's not a sexy way to spend money, for sure, but good accounting and tax strategy advice is something that can have a very real benefit to any business. What is best for you and your situation can be very hard to answer without a larger view of what your personal and business finances are so I really encourage you to get some solid professional advice rather than asking internet strangers (whether they're knowledgable or not!).
I always have (I got a new Ram1500 3 years ago) & I 179 all new equipment, but we have a lot of properties. My wife did the last 2 of hers in her S-Corp 100% against income. My daughter did her new Tundra last year but she has 6 units & a small farm. We have an excellent CPA & you cannot create a loss with the 179 & we more than qualify for the 50% requirement. After the initial 179 deduction I use the mileage allowance vs actual as new vehicles have little in the way of actual costs. We also have second vehicles for personal use.
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