Show Cars

[smarsian]

My husband is an independent contractor.  He has unique motorcycles and a vintage car.  We have placed promotional magnets on each of these and bring them to events, car shows, etc.  Can he write off repairs on these vehicles since he uses them for promotion/advertising?  If so, where would these costs be included?  advertising?  Maintenance?  Thank you

[rjs]

If I understand correctly, the motorcycles and car have nothing to do with your husband's business other than as a place to display an advertisement. If that's the case, I don't think maintenance and repairs would be valid business expenses. They are not "ordinary and necessary" expenses for advertising. He can deduct the cost of the promotional magnets as an advertising expense.

[smarsian]

Thank you.  Just for clarification he uses the vehicles to promote the buisiness at events, shows, and other high traffic programs.  and leaves them on when he is driving for enjoyment as well.  

Does that make any difference?

Thanks again!

[KarenL]

Unfortunately, that doesn't make a difference.  As rjs said, the cost of the magnets are the only deductible cost in this situation.  

[KimberW]

No, it doesn't make a difference. The cost of the magnets themselves is a deductible advertising expense. But simply having advertising signage on a vehicle doesn't change a personal trip into a business trip. If being at the car show is reasonable, ordinary, and necessary expense to further your husband's business, then the mileage to and from the car show could be considered business mileage.

Publication 463 from the IRS says on page 20:

Advertising display on car. Putting display material that advertises your business on your car doesn’t change the use of your car from personal use to business use. If you use this car for commuting or other personal uses, you still can’t deduct your expenses for those uses.

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This issue has also been taken to Tax Court -- where the court upheld the IRS's disallowance of a vehicle deduction claim based on the vehicle's advertising material. Another expert explained it well in this post.

In summary, traveling to and from business events may count as business mileage. That business mileage can be used to take the standard mileage rate deduction (if the vehicle qualifies) or used to prorate the total cost of the vehicle for the year into business vs. personal expenses. But having business signage on your car is not relevant to whether a trip is for business purposes or not.