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Company car for the Inn.

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The Farmers Daughter

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I am not sure how to go about broaching this topic, but I own a car that is 12 years old and on its last leg. It occurs to me that the B & B could take deductions on a company vehicle. Does anyone here have a "company car" for their establishment? What are the pros and cons to this arrangement? Thanks for any advice.
 

Morticia

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Talk to an acct. I know it's done and a lot of B&B's do it. You really need to understand if the car is YOURS or the INN's, tho. In case you sell down the road, what becomes of the car which has been depreciated for years?
 

EmptyNest

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Get a pro's advice.. I know I have seen innkeepers with those magnetic signs on the sides of their cars. Don't know if that is written off as advertising, or inn use car only on a percentage. Maybe someone who does it will post for you.
"From IRS: If you use your car in your job or business and you use it only for that purpose, you may deduct its entire cost of operation (subject to limits discussed later). However, if you use the car for both business and personal purposes, you may deduct only the cost of its business use"
Full document can be found here
 

Samster

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Be careful about insurance for the car. If you claim a vehicle as totally used for the business, the business can be liable for damage and/or injuries that occur while using the business vehicle. I know, I know....sad but true. This was one of the questions that I was asked by our commercial insurance carrier. They can also write specific riders for other people using the vehicle, blah, blah, blah. It's endless.
I pretty much use my car exclusively for business things and the occasional innkeeper's escape. I don't write any of it off. At this point, I'm bleeding red ink so much that it doesn't matter and it's not worth the hassles with all that insurance nonsense, too.
Good grief!
 

gillumhouse

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I have signs on my car but the car is owned by us. I keep mileage of my trips for B & B - bank, groceries, produce, escorting the guests with horses from the Interstate to the stable, Conferences, workshops, etc I give the mileage to my tax person and she deals with it. I do not know if she takes a part of the car insurance as business or not. I only know that I have more than enough deductions in a tax year. (FYI: a write-off would be the room rate you eat because a guest stiffed you, a deduction is what you take on taxes for expenses.)
 

Proud Texan

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It's pretty much like using a portion of your home for the B&B. Some rooms are 100%, but rooms that are shared by you and your guest can only be deducted at a percentage. If you use the "company car" solely for the B&B, then it would be a 100% usage otherwise a percentage of the upkeep and gas and actual B&B related mileage.
I would allow the B&B to pay for everything related to the car and keep it separate from your personal finances.
 

Breakfast Diva

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We have 2 vehicles, our personal car which we keep track of business miles driven and take the standard mile deduction. We then have a truck that belongs to the business. All expenses of the truck are paid by the business. It's very important that you keep accurate and separate track of business and personal.
 
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