I purchased a Kawasaki Mule UTV this year. It is used to transport customers while hunting. Is this a deductible expense? Is a percentage of it?

[eweh33]

I am a salesman for a company, and not self employed.

[Carl]

From the way in interpret your post, this is not an expense. It's a business asset and will be entered as such in the Business Assets section of your tax return. Then it will be depreciated over time, and the program will take care of that, based on the data you enter about the asset.

[Opus 17]

I think you can deduct the operating expenses similar to business use of a car, and that would include depreciation.  But, you're going to need a lot of records.  You can't use the standard mileage method since this is not a passenger vehicle.  So you first need the mileage or # of hours (does it have an odometer or hour meter?) used for work and the mileage or hours used for personal use, and the mileage or hours has to be recorded in some kind of reliable form; a diary, log book, or app, not merely remembered later or guessed at.  Then add up all your operating costs (gas, maintenance, insurance, repairs and depreciation, but not loan payments) and you can deduct a percent of those costs equal to the percent of business use.  

These expenses will be itemized deductions for work expenses subject to the 2% rule, so depending on the actual amount, you might not get much benefit.

[Carl]

As I understand it, the UTV is basically considered "equipment" since it's as you say, not a passenger vehicle. Then the cost of operating that "equipment" is a supplies expense. It's the same as would be for something like a fork lift.

[Opus 17]

But in that case the result comes out the same, right?  If the percent of operating costs is a supply expense, and the percent of depreciation is a depreciation expense, the net deduction is the same, just entered in two places (as an asset and I supply expense) rather than one place (a vehicle).

[Carl]

That's what I understand. The UTV is a depreciable piece of equipment used extensively in the production of income. The gas and oil needed to run it is a supply expense. The servicing needed to maintain it is a maintenance expense. Remember my definitions from "rental property assets/repairs/maintenance expenses defined"? The UTV is the asset, the gas and oil is the maintenance/supply expenses, and fixing that flat tire is a repair expense.

[Opus 17]

Except only a percent of business use that can be proved by a logbook, in this case.

[Carl]

Yes, that is true. Generally, keeping a log book should suffice. It also wouldn't hurt to have clients sign and date something akin to say, a "safety briefing" required before they can ride on it. That provides further and practically irrefutable proof of business use, should the need to substantiate such proof in the future ever arise.