<sftong2000[at]hotmail.com> wrote:

- quote -

Only to the extent you pay yourself for it, and you have to
report that income. So no, you can't.

- quote -

Whoever gets the money pays income tax on it.

Seth

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Paul, Thanks a lot for the insightful information! I really
appreciate it.

Would you mind helping me with a few clarifications?

1) If I buy a vehicle, I am sure it is going to be a mix use
for both business and personal, probably 60% personal. Will
the tax deduction be different, if the vehicle is registered
under LLC compared to under my own name but claims business
milage? Till now, I am not really clear as what items of
vehicle deduction can be claimed for business purpose --
milage claim, gas and regular maintenance (thought this is
already included in Milage claim), depreciation (so I get
only 40% depreciation according to business usage?).

2) I intend to use create web site to market my property. In
this case, I will imagine there will be more intense start
up work to develop and market the website. Can I claim
expense from the work (by hours) I put in? ? I thought if I
do not claim this, I would still have to contract someone to
work on this, might as well let me the business owner get
the money. I would imagine this will fall under the category
of marketing the rental property, which includes paying for
brochures etc.

Thanks a Lot!
Shawn

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- quote -

Both prior responses offer good information about the
questions the OP asked.

I have a question for the OP. How is the property going to
get into the LLC? It's often difficult to get a mortgage
lender to lend to an LLC, even if you, the member, offer to
cosign the loan. If you purchase yourself subject to a
mortgage and quit claim it into the LLC, then you're going
to be in violation of your mortgage loan contract. If you
own the property outright not subject to a mortgage then
this doesn't apply.

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- quote -

I had thought a home office deduction was in connection with
the active conduct of your trade or business?

Would that mean it does not apply to a passive activity such
as managing rental property?

__
Art Kamlet ArtKamlet [at] AOL.com Columbus OH K2PZH

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<sftong2000[at]hotmail.com> wrote

- quote -

It doesn't matter if it's new or used, when you buy it, it's
"new" to the business.

Now, you can't deduct teh purchase price of the vehicle as
an expense, it gets depreciated (expensed) over a number of
years.

- quote -

The mileage rate for 2007 was just released, and baring any
huricane in the gulf, it's going to be 48.5 cents per
business mile.

Your other option would be to deduct actual expenses and
depreciation. If you don't use that vehicle 100% for
business purposes, you will have to prorate the expenses.

- quote -

A mileage log works best. You can get them for a few bucks
at Office Depot or the like.

- quote -

Insurance is generally higher for a business owned vehicle.
There may be higher fees set by the state/county/city for
business licensing and permits, etc.

- quote -

Yup. You wouldn't reimburse the business, you would only
take the deductions based on a percentage of business miles
against total miles. The rest are non-deductible, and raise
your taxable income.

- quote -

Home office deductions for rental property are a hard sell
in an audit. The rules for a home office are a defined
space that is used ~regularly~ and ~exclusively~. While you
can easily carve out something that looks like an office and
use it exclusively as an office, the "regularly" part is
questionable for rental activities that, what, maybe
requires opening a few envelopes with checks, and paying a
half dozen bills a month.

How many rental properties you have, and the actual amount
of time you will put toward this activity will determine if
you can claim a home office.

- quote -

The lexus sedan, camery or mini-van will fall under the
regular vehicle rules for depreciation, and if you broach
the "luxury" limits (a whopping $14,800) your depreciation
gets limited.

- quote -

Yup. There isn't any huge need for an office if someone
else does the work, and the amount of travel would be much
less if you weren't "active" in the business. You also run
the risk of not being able to deduct losses (because you are
passive) in the rental activity.

Consult a local CPA or EA about your options on the vehicle
and home office as well as what and when you record income
and what are the deductible expenses for rental activities.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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Hello, Thanks for looking, and I Thank You in advance for
contributing your suggestions.

I intend to set up a real estate llc. Since I anticipate I
will make numerous trips to the property to meet potential
tenants and for various business reasons, I think my car may
qualify for a deduction. Here are my questions:

1) I am looking to buy another used car after the llc is set
up. Can I deduct the used car for my business expenses? or
only new car is deductable?

2) What items are eligible under this deduction? Car
Depreciation, maintenance, or just a lump sum of $0.35/mile
payable to me (the car owner)?

3) What evidence would IRS require me to show them that the
car is used as business expense at a certain date and time?

4) Is there a better choice between Me VS The LLC as the
owner of the used car? I heard if LLC is the owner, it
would face more challanges in getting the financing. Also, I
will need to "re-imburse" the LLC for any personal use --
getting more complicated here?

5) I also intends to spend some time at home to perform
marketing work for the rental property. Therefore, can I
also claim my home office as part of the deduction?

6) I heard that car deduction vary -- by weight (over 5
ton), by luxury? I am looking to buy either a used lexus
sedan, or a used camry. Unless there is a good reason to buy
large car, then I may consider a minivan.

7) Will any of the above deduction scenarios be impacted if
I were to contract the rental property to a property
management company?

Thanks for helping!

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