Hi,
If the company I own buys the bus conversion, can I still drive it on a regular licence? Is the issue ownership or whether I am charging a fare for people to ride in it with me which I won't be doing? I just prefer the bus solution to air fares and hotels and I have a lot of travel coming up this year.
The alternative is to pay myself a big bonus, pay the tax and buy it personally but I'd rather pay for service and repairs etc on the company dime if poss.
Anyone have any experience with this?
Thanks, Paul.
OK we ran into this past summer with some nascar boys that were moving there motorhomes from one race to the next. On the way three were stopped by the Hp to be checked in Tenn. two drivers had Class B and one had a class c. the c driver was not allowed to go on. Because the Motorhome was in the company's name so now it is commercial. So the other two driver went to the state line dropped a bus came back after the third coach after crossing into Ky. they all took off again. So take that as you may Go get a class B and air brake in your motorhome if it is over 26000 lbs.
Interesting question. Disclaimer: ask your tax professional.
If the purpose of the bus is to save the company money or to , then it should be a reasonable business expense. It seems to me that if the company buys it, you would then depreciate it over whatever time period the tax rules allow. If you travel for business, the business should be paying your expenses now (i.e. hotel, airfare, meals, etc.). So in place of that, the business would now be paying for fuel and campgrounds. If you go off on a weekend excursion which has nothing to do with the business, then you should be personally responsible for that fuel, campgrounds, etc., plus you should probably pay the company some kind of rental for the personal use of a company asset.
I'm sure that John Madden didn't pay for his bus out of his own pocket, but used it as a business expense.
Ask your tax professional.
Also, as was noted in 704's post, make sure you have the right license. You may also need to have it registered with the DOT, etc., not sure about that. Others here have some expertise with that aspect and can give you better insight than I.
Mike
I did it for 25 years Paul never had a problem even used the my Co credit card for fuel lol you can get some breaks by doing that
good luck
Depends on factors. If your company owns it, and you registered it as a Private coach not for hire you will be ok. I have a 20 seat day executive coach, also registered with a DOT number and as long as you use it to transport company employees and clients without charge, in other words charitable causes, you are fine and do not have to go through the DOT safety audit. You need to have Private coach emblems on the side and no company advertisements. This moment you put your Company name on the side or an decal you will fall into the CDL licensing. I can even use it to transport Boy Scouts, church groups, senior citizens, etc. etc. as long as a fee is not collected and charged therefore any of my employees may drive it.
Kade
Paul, you bring up multiple points. I thought about this when I bought the 4107, since I also own my company, and I had a thought of using it on business travel.
First, I did not buy it in the company name -- our anticipation is mostly personal use. The issue was business use, then how do I get reimbursed for mileage (IRS car rate woudn't touch the real cost), and how would I bill my clients for the expense? Now, they pay my travel cost - airfare, mileage, plus lodging (and, of course, other expense). Some of my clients are public transit systems, and some of them require a receipt for anything over 1/10 of a cent. If I billed them at only the mileage rate, there would be no auditable (is that a word?) way to recover other costs -- either mileage-related, or a charge for its use as lodging.
So, my situation isn't quite the same as you're proposing, but I would ask you if you'd plan to use the business asset for personal use. How would you account for that? I did talk with my CPA a bit, and we couldn't come up with anything reasonable -- beyond using the IRS mileage rate. My longstanding instructions to my CPA is that I don't do anything risky or questionable, the only mail I want to get from the IRS is a thank you (yeah, right), or a refund.
Now, if you take care of those obstacles, you get to the licensing question. If the vehicle is registered to the corporation, does it become a commercial vehicle? Think about who owns the vehicle, not whether you're carrying passengers for hire. Even if you don't charge, such as a church bus, I would think that you'd be classified as a PMCP, a Private Motor Carrier of Passengers. What triggers a CDL here? 15 seats (16, including the driver), OR 26,000 pounds. So, even if you walk that line, you'd be at the mercy of a cop - and there have been examples of cops that exceeded their knowledge when writing tickets.
Your best bet would be to talk with a CPA, and perhaps a lawyer, presenting what you want to do, and seeing how best to do it. If you don't anticipate personal use, then ownership by the Corporation, with you getting a CDL, would probably be the cleanest. If you have a valid business reason, then the expense of getting the CDL, could also be a business expense.
I believe there is an IRS form that is used for money you pay, on behalf of the business, that is not directly reimbursed by the business (we're a Subchapter S Corp). I don't do it that way, eveything I lay out on behalf of the business, is reimbursed to me directly. The bank tellers I normally use are used to seeing checks made out to Arthur, signed by Arthur, and endorsed by Arthur (when I don't use EFT). You, however, might want to explore that avenue.
Arthur
koztcade I think you are bad wrong anytime you go over 15 seats you are commercial. And must conform to that. that means class b with P endorsement. Please do not get anybody hurt. You will be done with your hole life. PPPPlease call your your license office don't give them name and ask and be honest with the questions. and then call your insurance company and see what they say. And fees do not matter it is commercial if people are being moved even if there are only 3 people being moved in a 16 seated Vehicle.
yes You can buy a motorhome and lease it back to the company on a mo to mo or per trip the company buying a motorhome will sometimes send up red flags with the IRS
Busing704-
You need not presume before you find out all facts pertaining to situations. I have been in the transportation industry for over 30 years with out as much as an accidents by me. I have a hauling and excavation business with snow removal contracts in 2 states so my insurance amounts are just fine and I assure you that I am more than state coverages require. My personal coach carries a DOT inspection from year to year and I received my Class A Chauffeurs License in 1976 with bus endorsement which Grandfathered into the National CDL program. You need to research your facts before you start to criticize anyone and understand that there are two different distinction of Private Motor Carrier Passenger Regulations- Commercial and Non business, hence the reason I said make sure it is registered as a non hire private coach which makes it non business although a business owns it.
Examples of non-business PMCP's include churches, private schools, scout groups, and other organizations that may purchase or lease buses for the private transportation of their respective groups. including a business. However, if a fee is charged for the transportation, the PMCP becomes a for-hire business and is subject to all applicable DOT regulations.
The orginial post which I responded to was about the licenseing of the Driver
From my Safety Auditor......
Sorry to all ...I do not want to cause a drama thread so this is my last response here....Kade
Sorry about that you had not given any of that background. again Sorry
Quote from: Runcutter on February 05, 2011, 04:01:34 PM
Paul, you bring up multiple points. I thought about this when I bought the 4107, since I also own my company, and I had a thought of using it on business travel.
First, I did not buy it in the company name -- our anticipation is mostly personal use. The issue was business use, then how do I get reimbursed for mileage (IRS car rate woudn't touch the real cost), and how would I bill my clients for the expense? Now, they pay my
Doesn't the IRS allow use of the per mile rate or actual expenses as a deduction? I'm not sure how actual expenses would be figured if a vehicle was only used part time for the business. Most people I know for passenger vehicles just use the per mile rate, but it doesn't make sense for an RV.
I do know a few business owners who use their company car as their personal vehicle. It is technically illegal unless you list use of vehicle as income.
Just curious... There are commercial companies which rent/lease RVs all over the country. Last time I looked into renting one, they didn't require anything more than a normal license. Are those units registered as commercial vehicles? Seems to me your company might be able to buy the bus and "lease" it to you as an individual. That way the company could cover insurance and maintenance costs and claim the depreciation, yet the vehicle and driver be considered personal use. Note: I have no clue what I am talking about...just thinking out loud...
Brian, according to my understanding, you're absolutely right - either mileage rate or actual expenses. The problem would be how to establish actual expense for a vehicle if it is not used 100% for the business. It works for deducting home office expenses, with the right IRS form -- allocating expenses to personal, or business, depending on the percentage of area occupied by the business. In our case, the business pays its share (12.94%) of the utilities, and other appropriate building expenses.
I don't know if there might be a way to do this on such a vehicle expense. That's why a good, honest (they don't go to jail, you do) CPA would be a good idea.
Kade, I just re-read your initial post. The first time I read it, I also read it that you didn't have a CDL. Re-reading it, you didn't discuss driver licensing -- but I would say Busing made the same honest mistake I did (with over 40 years in the bus business). I thought about making the same observation, (but worded much more softly), so I'd suggest that it might be an honest mistake, both in the reading, and the choice of words.
By the way, it's nice to see someone who knows what a PMCP is. Many years ago, an employee asked me what a BFOQ is -- when I responded "Bona-Fide Occupational Qualification", she walked away shaking her head.
Arthur
Thanks for all the great responses so far.
Let's take the tax issue off the table (I have a very smart accountant and plan to used it for business purposes only) and focus on the Po Po :-)
If it is registered as a private, not for hire RV and I'm driving on a regular licence - am I cool or can I land in trouble for driving a "commercial" vehicle without the appropriate licence.?
Cheers, Paul.
Paul,
My bus is owned by our company, it is registered as an RV and I have a regular DL. Private coach labeled on both sides.
I've driven it all over the country for the past four years, even had a Willie Nelson shakedown last year in Arkansas ::), and been through all sorts of produce and immigrant check-points, no problem. I do make sure there is no company equipment in our bus when traveling from show to show.
Don't ever go through a weigh station, no matter what the signs say!
Brandon
You can find tax advantages to any scenerio with the bus. Buy it yourself ( with the bonus ) then lease to your company...or....have your company buy it and BORROW it on personal trips and such. There's no end to the ways to work it out. Best advice - talk with Tax guy.
In 17 yrs as an Elec Contractor in the Phx area with up to 12 crews (trucks) and all headaches, my tax guy kept me out of trouble and made sure I had as much fun as possible ;D without the IRS being involved 8)
phil
Thanks brando4905! That's all I needed to know. Case closed I guess.