How to depreciate Toy Hauler

[kenaslan]

I purchased a Toy Hauler last year to use in my two business.  First I sell/transport rare Sheep.  I also use it to take my mining equipment to the gold mine I own.  How do I spread the depreciation between the two, and what depreciation schedule do I use?  I also used it twice for a vacation.

[PatriciaV]

The easiest way to allocate the cost of the Toy Hauler is to use the Standard Mileage Deduction. This method requires only that you track the mileage for each business and the total mileage for the year. Your vacation mileage is personal use, so that won't be included in the business miles.

If you decide to use actual expenses, you will use the same criteria. But there are many other questions to answer when you report the same vehicle to more than one business.

[kenaslan]

As a Toy Hauler is a trailer, in my case a fifth wheel, so mileage is not possible.  Also mileage DOES NOT include depreciation.

PLEASE, if you do not know, do not make something up!!!

This is how to depreciate a trailer.  What I want to know is how to divide it between two business

MACRS

Review the current MACRS tables released by the Internal Revenue Service.

Find the depreciation percentages most closely associated with the current trailer.

Multiply the depreciation percentage by the trailer’s historical cost. This represents the annual depreciation for the first year.

Subtract the first-year depreciation from the historical cost. Multiply the difference by the second-year depreciation percentage to compute the second-year depreciation figure.

Continue this process following the MACRS table until the trailer’s historical value is zero.

[AnnetteB6]

When you enter an item to be depreciated for business purposes, one of the entries is the percent of business use based on time.  

Keep track of the use of the toy hauler between personal (vacation), and each of your businesses.  You can use any method to calculate the percentage allocation (hours of use, days of use, etc.), just be consistent and keep records of your calculations.  Then, enter the appropriate business percentage as part of the Asset information for each business.  TurboTax will question you about what type of asset you are depreciating -- trailers should be on the list for you to select.

You are correct that the toy hauler would not qualify for the standard mileage deduction because it is not a stand-alone vehicle.  However, when standard mileage is used, the cents per mile is divided among various categories of vehicle expenses and a portion of that cents per mile is allocated to a depreciation equivalent for the vehicle, even though actual depreciation of the vehicle is not taken when the standard mileage is used.

@kenaslan

[kenaslan]

After studding this you are both wrong.

Since an RV is a “dwelling unit” and considered a residence, it falls under a peculiar part of the tax code (§280A ) that places specific restrictions on deductible expenses for dwelling units. Whenever one uses a dwelling more than 14 days for personal lodging or >10% of days in which the dwelling unit is rented to other parties, deductions for the dwelling are limited to income derived from the RV or within the RV (like an office in the home) or not allowed at all.  Once you watch TV in the RV or do any personal act, you are using the RV for personal purposes as a dwelling and cannot deduct any further expenses. This is true even though you are using the RV as a second residence to deduct rent for an apartment at the assignment location normally. The ownership changes the deal.  You cannot deduct the costs of the RV nor depreciate the RV since it is used as a residence > 14 days.