RV used in construction

[Maribeth]

Have a general contractor, S-corporation, that got work in North Dakota in 2012. He bought an RV for around $55,000, hauled it to ND and has been running the business out of the RV. He also is sleeping in the RV, along with his wife, who does all of the administrative functions for the business.

So . . . . . . my first question was what was the depreciable life. I believe I answered that: 5 years, as either an RV or a construction asset.

Then, I started to wonder whether the RV is even depreciable because they are living in it. And I am starting to second guess myself.

Would appreciate any input from any of you that have already dealt with this type of question.

[Guest Taxed]

I think you will need to use the rules for 8829. If you think about it is their home that is being used also as an office. The difference here is that it is on wheels instead of a footing.

What is the area that is regularly and exclusively used in the business? That is a tough one in a RV??

[grandmabee]

is this a temporary job? Do they still have their primary residence? if so I would take the expense but not for wife. I would take a meal allowance also if meet requirements of temporary job

[Maribeth]

But this is an S-corp so I cannot use Office-in-Home. I could reimburse the corporation for expenses incurred by the shareholder/employees while living in ND. And of course there is the interest on the RV, which on the 1040 would be deductible.

They ran everything through the S-corp, all payments have been made through the S-corp. I better check the purchase papers/loan documents to see how the RV is titled.

[Maribeth]

It is a temporary job in that it is a project, building apartment buildings and single family homes; I believe there are 40 homes & about the same in apartment units. Once that project is done, they will be coming back home. They are not going to move to ND permanently.

[grandmabee]

but will it last less than a year? can the S- corp set up an accountable plan to reimburse the employee their out of town expense?

[jainen]

>>whether the RV is even depreciable because they are living in it<<

It's personal use; he can't deduct it. If he fusses, tell him the corporation will have to show taxable fringe benefits on the W-2.

[grandmabee]

so are you saying when a construction worker goes out of town job for 6 months and lives in a RV there is no deductible expenses related to that?

[jainen]

>>so are you saying when a construction worker goes out of town job for 6 months and lives in a RV there is no deductible expenses related to that?<<

I am not saying that because I don't see anything about that in the original post. The question is whether a corporation can deduct housing provided to an owner/employee.

[OldJack]

I would expense on the corp books and deduct as the unit is being used for business. Accommodations are for benefit of the employer corp and are common and necessary business expense.

[Maribeth]

Thank you all for your opinions/insights/thoughts/suggestions. I appreciate it all. You make me think and sometimes push me out of my comfort zone. I would be lost without this board.

[kcjenkins]

I agree with Jack.