Re: Single Person Sole Proprietorship Catch-22?

On Thu, 29 Mar 2007 13:46:40 -0500, "Shyster1040"
<Shyster1040@xxxxxxxxxxxxxxxxx> wrote:

If you wanted absolute certainty, then you should have stayed out of the
truck until the precise second in which you were ready to begin
immediately using it in a trade or business.

For all intents and purposes, the truck either sat there unused or was
used for business-related purposes from the day I took delivery. The
damn thing is too uncomfortable and too expensive to drive for
anything else at an average 9-10 MPG and I have three other better
vehicles to drive for my personal needs. That's not the issue. The
issue is what is necessary to prove "no conversion from personal use"
to the IRS in an audit to save my Section 179 deduction rights.

Other than that, factors that will be counted include things like how many
miles you put on the clock during those "spins around the block" - if your
block is 500 miles around, count on losing if you drove around it a number
of times; otherwise, since even brand spanking new vehicles have from 100
to 300 miles on them when sold as new, if you have somewhere in that
neighborhood after your "spins" then you most likely have nothing to worry
about.

The "spins around the block" were a mere talking point. Even by the
most liberal stretch of the imagination, my personal use of this truck
was no more than 2 percent of my entire 2006 mileage.

Another factor will be the insurance you obtained on the truck -
you have to have insurance any time you drive, including when you go out
for a "spin" around the block - so, if you took out commercial or
business-use insurance on the vehicle initially, you probably have nothing
to worry about, if you initially took out personal-use insurance, and
didn't convert over until some time later, then there's a good chance
you'll lose the argument.

An excellent point, and a potential stumbling block for me, as my
insurance agent recommended against (and I accepted his judgment)
purchasing a separate, stand-alone "business" insurance policy for the
truck. I see now where that decision could easily come back to haunt
me in an audit. We never talked about potential income tax
ramifications.

Bye-bye Section 179 deduction!!!

Thanks,
Don P.
.

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