I bought an RV to set up in my yard as a home office for my business. I have no intention of using it for anything else and it won’t be moved (it was delivered and set up). I got it because I don’t have space in my house for a dedicated office, and with an RV, I don’t need permits like I would for a building. It cost less than $10K, and I paid for it in full. Can I write this off as a business expense? If so, is there a particular classification or tax treatment I should be aware of?
This could depend on the IRS revenue agent. Generally, they may view it as a personal use item due to it being an RV, even if it’s used for business. However, if it’s 100% business use, there’s no issue with the tax law. Be sure to take pictures of the RV set up as an office and documentation to support the lack of space in your home. That way, if you’re questioned later, you have evidence to back it up.
@Amari
You could add a time-stamped camera to show it’s not being used for personal trips. That could help prove it’s only being used as an office.
Kirby said:
@Amari
You could add a time-stamped camera to show it’s not being used for personal trips. That could help prove it’s only being used as an office.
Good point, but not sure how practical it is to go through years of footage to verify business use. A better approach might be photos of the RV as a home office and your house to prove there’s no space there.
If you’re self-employed and the RV is used exclusively for your business, you can likely write it off. You may even qualify for Section 179, which allows you to deduct the full cost. Make sure you have sufficient net income to claim the full deduction.
@Delaney
I’ve been profitable for the last 5 years, so I should be able to deduct it. However, this year I’m spending more on advertising, which might result in a small business loss. I’m looking to reinvest as much as I can into the business to eventually quit my day job.
@Yani
If you can’t claim the full Section 179 deduction because of income limitations, you can carry the remainder forward to future years.
Delaney said:
@Yani
If you can’t claim the full Section 179 deduction because of income limitations, you can carry the remainder forward to future years.
If it’s going to cause a loss, you might want to reconsider using Section 179 since it could impact your taxes negatively.
Yes, you can write it off as a 5-year asset, but make sure it qualifies for business use. Section 179 or depreciation can apply.
It seems unlikely to qualify as ‘ordinary and necessary’ for business use since it’s an RV. Unless the RV is permanently affixed to the property and not used for personal purposes, it might be seen as a vacation vehicle instead. Expect scrutiny from the IRS.
@Bevin
The seller suggested placing the RV on a cinder block foundation to keep it stationary, which would make it more permanent. I haven’t done it yet, but I plan to do so soon. Does that change anything?
@Yani
Yes, that would help, as it would indicate it’s not intended for travel. A more permanent setup makes it easier to justify for business use.