I recently got magnetic "I Buy Houses" signs for my vehicle. In one of his courses Ron Legrand says I can claim that all my mileage now is related to marketing and my business and take the deduction. My accountant says "dream on." Plausibility aside, has anyone actually done this and gotten away with it?
No, you cannot legally deduct those miles unless you're actively doing something in the business and when you do that you must keep mileage logs.
According to the IRS, simply placing advertising on your vehicle doesn't make it a business vehicle. You can only deduct mileage directly related to the business (i.e. going to and from closings, to view property, to show property you own or control, to go meet Sellers/Buyers to fill out paperwork, etc.) with or without signage on your car. There is one notable exception: If you are driving around in a vehicle that advertises another person's business (like the large trucks with changing digital billboards), then you can deduct all your mileage, because you are driving several hours a day to just get exposure--but you are in the advertising business. Why not take "actual" expenses instead of mileage? If you don't Lease, you can't deduct the car payment, but you still get to deduct repairs, taxes, insurance, and the biggie--depreciation. I wouldn't deduct gas, though (hard to prove in an audit). And you can only deduct the business percentage (you are probably okay at 80 percent), unless you have two vehicles and use one exclusively for business. Ideally, it should be owned in the business name, or else you have a couple of other hoops to jump through (like incorporating your business and adopting a reimbursement plan for business use of an employee's personal vehicle).
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"A deal is only as good as the quality of your Contracts." --Me
[ Edited by LeaseOptionKing on Date 09/23/2007 ]
[ Edited by LeaseOptionKing on Date 09/23/2007 ]
This post made my day. Ron Legrand is just blowing smoke. Most gurus have something like this which, I categorize as, "Just Seminar Talk". Listen to your accountant.
That said, I will say that I am always looking at property...
I don't claim every mile but I do claim quite a few and I document what I look at.
If you claim miles you can log the whole year, quarter, or month and multiply by 12.
WHy not take a month that you are looking at a lot of properties to buy and make sure that you log the miles and each location in your logbook.?
Moat people don't claim enough write offs. As long as you think you have a "reasonable" claim on the deduction, take it..
[addsig]
The IRS requires detailed logs for mileage. The better records you have, the better your chance of prevailing on audit. The issue is remembering to do it and getting into the habit of doing it.