Any tax deduction for new vehicle, my situation?

Question

My income is mostly from rental property (single family) but I still do some residential construction (mostly remodeling).

my pickup (07 Tundra has a transmission issue - for now just a check engine light) will need replaced within a year or maybe two.

1) Construction Co.

Would make the most sense for a serious deduction but since I've focused more on rental property my construction company doesn't gross enough to make the purchase of a new vehicle a viable one, probably get audited and then not sure what they would do.

2) Rental property wouldn't make sense either because it would be an administrative nightmare ( CPA says) to divide every expense up per each home.

If I change to having them all owned by a single LLC then if someone won a lawsuit against me, I could lose it all.

Deductions for now since I use my truck for Construction, Rentals & Personal is based on  mileage or I just get the standard mileage deduction (7k).

Just trying to be wise before I just do something.

Any thoughts on this would be appreciated.

Thank you, Joe

Greg Scott · Answer

You need a new CPA.

First of all, it would appear you might qualify for real estate professional status which would unlock lots of tax savings.

A much easier way to solve your LLC problem is to create a management LLC.  Have each of your LLCs create an agreement with this management LLC and have them make some regular payment for services to the management LLC.  You can run all these expenses through your management LLC.

On the other hand, you shouldn't need this management LLC.  There are plenty of expense tracking software for your mobile phone that make this pretty easy.

Basit Siddiqi · Answer

If you use the vehicle for your rental trade or business. Then yes.If you use the same truck for personal purposes, then you have to properly allocate the expense as the truck is used for business and personal purposes.