Per diem again???

TJ959 · Oct 10, 2005

I recently moved from a "D" truck to a van. How does per diem still apply in my new situation since I no longer log. I still keep a log on miles driven loaded and empty and destinations and layover locations. My wife is concerned that it may no longer apply because I don't hve an audit trial in the form of approved logs.

Fkatz · Oct 10, 2005

recently moved from a "D" truck to a van. How does per diem still apply in my new situation since I no longer log. I still keep a log on miles driven loaded and empty and destinations and layover locations. My wife is concerned that it may no longer apply because I don't hve an audit trial in the form of approved logs.

Truck #079

TOM

Tom

You do not lose the per deim, as long as you keep copies of your B/L's and your settlement sheets. this is enough proof for an IRS audit if you get audited. remember to download or copy and print the CCM Memo that is in a former message.
The Question I have for you is When did you downgrade to a Van, and what has happened to the "D" Unit.
Since now if you still have it, and it was used this year, you might still have to stick to actual expenses, and not be able to take the vans standard milegage rate. I would have to find out exactly for you. Give me about a month to get all the answers for you. to make sure which way the van can be deducted. i know since it is a new vehicle in your business it should be able to take the standard milegage rate for it. but you will have 2 trucks showing on your return, it would be a matter of when, and what happened to that truck.
plus the depreciation would have on the "D" to be recaptured if you used it as a trade in.

Frank

TJ959 · Oct 22, 2005

D truck was sold 9/13, van bought 9/14 with no trade in. There was a gain on sale of D truck, and believe that will need to be deducted from cost of van before figuring depreciation, which I see is over 5 years.

We keep all receipts and do full actual-cost accounting. Would standard mileage rate mean less taxes than using actual expenses? Doesn't standard mileage replace depreciation, fuel, and repairs? Anything else? What's the difference between methods when selling the van and getting out of expediting?

The question about per diem was mostly whether van O/Os are subject to DOT "hours of service" rules--sounds like they are. What qualifies as a day for per diem? We have just been counting the days out overnight, and figuring it will all average out over a year.

Tom's wife, Jenny

Fkatz · Oct 24, 2005

2. "RE: Per diem again???"
Oct-22-05, 11:27 AM (EDT)
In response to message #1
Jenny,

D truck was sold 9/13, van bought 9/14 with no trade in. There was a gain on sale of D truck, and believe that will need to be deducted from cost of van before figuring depreciation, which I see is over 5 years.

(1) Cargo Vans do not get deprecitated due to the Standard Mileage Deduction, They just get listed on your depreciation schedule with no price entered just the date purchased and percentage of use.

Did you use any of the gain on the truck for the Van. then that would
be used to offset the gain. But, you will also have to recapture all of the depreciation that was taken over the years that you used the "D" unit for business. it is still consided a like-kind exchange, due to the fact that the van is doing the same business. and would have to be treated as one.

We keep all receipts and do full actual-cost accounting. Would standard mileage rate mean less taxes than using actual expenses?

{2} YES it would reduce your tax liabilty

Doesn't standard mileage replace depreciation, fuel, and repairs?
{3} YES

Anything else?
{4} NO

What's the difference between methods when selling the van and getting out of expediting?

{5} Your Sch C is no longer filled out if a sole proprietor, Vehicle is no longer in business and it becomes personal vehicle, But it cannot be duing the tax year. it would depend on when you are out of buiness.

The question about per diem was mostly whether van O/Os are subject to DOT "hours of service" rules--sounds like they are.

(6) Van Operators at the present time are not subject to the HOS rules due to the fact that they are under 26,000 lbs. But if you have a satellite on your vehicle, a Log book is required in certain states. Check with the DOT in the states you are going through, I know for a fact that Alabama requires one. If you have commerical plates, in the states that state all commerical vehicles must scale, that means you. no if's an's or but's NC is one of them. but no log book is required. Log Books eventually will be required by all.
but no laws are passed for it. it is based on individual states.

What qualifies as a day for per diem?

(7) Per Diem pertains the time that you actually leave your home to the time you actually return home. meaning if you leave Lets say on Monday at 3pm, you are entitled to 1/2 day logged, and dont return until a week from that coming Friday afternoon at 5:30 PM, you have been out for a total of 10 days plus the 1/2 day for Monday when left and 3/4 of a day for Friday that you returned, so you have been out for 11 1/4 days.

We have just been counting the days out overnight, and figuring it will all average out over a year.

Tom's wife, Jenny

it really does not average out, you must keep accurate records of when you left and when you returned. Just like you logged. this is due to the fact that it is based on 1/4 days, Midnight to 6 AM, 6 Am to NoOn, noon to 6 pm and 6pm to midnight.

Any other question please do not hesitate to ask,

Frank
Frank's Tax & Business Service

TJ959 · Dec 27, 2005

Thanks for your help, Frank. I'm still struggling with the tax reporting on this sale. D truck cost $25,000 11/03. We deducted $1250 depr. in 2003 and $9500 in 2004, so book value was $14,250 the end of last year. Sold it for $17,500 in September, so I think we have to claim a gain of $3250. Is that subject to self-employment tax or just fed and state income tax? What form do we report it on?

All of the cash from the D truck was a downpayment on the new Sprinter van. If we're using the standard mileage rate, does it really matter?

We just had an $1800 heater installed in the van. If we're using the standard mileage rate, is that even deductible?

Another question on per diem. Since trips never start at 6 or 12, how many hours do you need to count as a quarter day?

Even with no logging, no satellite, no commercial plates on the van, can we still take per diem? We do keep a manual record, have settlement sheets, BOLs and a lease agreement, and he's gone days at a time just like in the D truck. So it seems the same. But tax laws aren't always logical!

Jenny