Auto deductible a tax deduction? / Empathy Plea

Lumpy_Bass · #1 08-20-2010, 07:52 AM

Warning Pre Question Vent Session*********
Gig was over and we were all packed up and finished with the usual post show lot hang. My drummer and I were both backed in towards the load out door on an angle in a way that lined his drivers side door up with my rear passenger side 1/4 panel. The parking was tight as usual in this area. Feeling good about the gig I got in my car and cranked up some tunes for the ride home. Guess the music was a little too loud because I didn't hear my drummer and guitarist yelling WAIT, STOP etc. So I pulled out and DID hear the unmistakable sound of crunching metal

His door was open and was caught by my rear quarter panel. My vehicle received a nasty dent and his door became bent and unclosable.

Anyway being the responsible party (for the most part) I called in a claim to my insurance. My deductible is $500. The band is a multi-member LLC so we write off our own individual expenses against the band income on our personal taxes. Since the accident occurred while the vehicle was be used for the band does the auto deductible qualify as a tax deduction? Also I think it would be very therapeutic for me if anyone else had some gig related disasters to share what were outside of the performance. Thanks for reading this far and thanks even more for a reply!

tycobb73 · #2 08-20-2010, 08:03 AM

The only way it qualifes is if the band, as an LLc, owns the vehicle. If you personally own the vehicle, then you are subject to the mileage rules which take things like this into account.

tycobb73 · #3 08-20-2010, 08:04 AM

My former guitar was showing up to our gig in very bad whether. A van slid through a traffic light and hit him, right outside the gig. Did thousands of dollars of damage to his car and it was never right after that.

Lumpy_Bass · #4 08-20-2010, 08:11 AM

Quote:

Originally Posted by tycobb73

The only way it qualifes is if the band, as an LLc, owns the vehicle. If you personally own the vehicle, then you are subject to the mileage rules which take things like this into account.

Crap! I was hoping to at least qualify for a percentage of it!!

Phalex · #5 08-20-2010, 08:23 AM

Bass playing C.P.A. to the rescue!

MNAirHead · #6 08-23-2010, 02:43 AM

Wow...

I'm not an IRS Agent.. it really doesn't pass the stink test.

If the car is used for personal use, my "guess" would be the max allowable would a fraction or allowable miles to total miles.

It becomes less stinky if you paid a claim deductable to someone else..

Bumer.. hopefully the band member was cool about it.

Tim

Dekker · #7 08-24-2010, 05:56 AM

Don't know about you guys in the states, but up here in Canada, our Revenue Agency has an 800 number to field questions like this...

Perhaps it's time to let your fingers do the walking?

billjr · #8 08-24-2010, 08:37 AM

If you itemize deductions, you can deduct the costs of a property loss, even for your personal vehicle. There are some restrictions and limits, so be sure and research what those are.

ohskigod · #9 08-26-2010, 10:45 AM

800-829-1040 is the IRS if I am not mistaken. I called them a couple times, they are actually quite helpful

MatticusMania · #10 08-26-2010, 11:44 AM

Quote:

Originally Posted by Dekker

Don't know about you guys in the states, but up here in Canada, our Revenue Agency has an 800 number to field questions like this...

Perhaps it's time to let your fingers do the walking?

Calling the IRS? Better have your schedule clear for the next 3-6 hours.

OP, I once backed out of my driveway and hit my singer/guitarists front end. Just some minor scraping.

Lumpy_Bass · #11 08-26-2010, 12:26 PM

Quote:

Originally Posted by MatticusMania

Calling the IRS? Better have your schedule clear for the next 3-6 hours.

OP, I once backed out of my driveway and hit my singer/guitarists front end. Just some minor scraping.

Yeah, Not sure if i can tie up my work line for that long without drawing some suspicions. BTW here's a pic. Body shop said $2200 and two weeks for a whole new quarter!

MatticusMania · #12 08-26-2010, 12:57 PM

Too shiny for me to see the full extent of the damage. Your car is either VERY clean, or plated in chrome.

singlemalt · #13 08-26-2010, 01:09 PM

I would be very quiet about things like "band, gig, late night load out, after gig hang time..." Using your vehicle for a business use puts a whole new spin on your auto insurance, which you agent will be glad to explain while he works to screw your on you claim.

You had an accident, nobody got hurt. Pony up the $500 and get the vehicles fixed. That's what insurance is for. Get loaners while they are in the shop.

Oh, and tell your bud you are really sorry you hit his car, try to take any inconvenience out of the repairs.

ahc · #14 08-26-2010, 01:20 PM

"Merely a flesh wound." Seriously, my condolences.

Lumpy_Bass · #15 08-27-2010, 06:27 AM

Quote:

Originally Posted by singlemalt

I would be very quiet about things like "band, gig, late night load out, after gig hang time..." Using your vehicle for a business use puts a whole new spin on your auto insurance, which you agent will be glad to explain while he works to screw your on you claim.

You had an accident, nobody got hurt. Pony up the $500 and get the vehicles fixed. That's what insurance is for. Get loaners while they are in the shop.

Oh, and tell your bud you are really sorry you hit his car, try to take any inconvenience out of the repairs.

Your second sentence were the exact words of my guitarist who is also a former auto mechanic.
No doubt, that is the road I am taking. I did mention the gig when placing the claim but I don't really think it's going to affect my level of service.

MNAirHead · #16 08-27-2010, 08:30 AM

Quote:

Originally Posted by Dekker

Don't know about you guys in the states, but up here in Canada, our Revenue Agency has an 800 number to field questions like this...

Perhaps it's time to let your fingers do the walking?

They periodically will answer a phone in under 5 minutes.. othewise order a pizza.

MNAirHead · #17 08-27-2010, 08:32 AM

I asked this to aan advisor who's never been wrong.

He commented that direct mileage is the deduction --- rest of it will cause some out of control calculations.

His other comment is that there is buisness insurance for stuff exactly llike this - unsure if your band is insured..

The reality is this is a finite risk - pay it up.. deduct your business miles.

billjr · #18 08-27-2010, 09:12 AM

Quote:

Originally Posted by singlemalt

I would be very quiet about things like "band, gig, late night load out, after gig hang time..." Using your vehicle for a business use puts a whole new spin on your auto insurance, which you agent will be glad to explain while he works to screw your on you claim.

You had an accident, nobody got hurt. Pony up the $500 and get the vehicles fixed. That's what insurance is for. Get loaners while they are in the shop.

Oh, and tell your bud you are really sorry you hit his car, try to take any inconvenience out of the repairs.

So you think that abiding by a written legal contract is "screwing" someone? You obviously don't know what you are talking about, as in my 20 + years of being involved in insurance (as an agent and adjuster) I can't recall one instance where a claim was denied because someone used their vehicle to haul their music equipment to and from gigs. While there are some business exclusions in every auto policy, and these vary from state to state and company to company, the exclusions are not directed at this type of use, but generally are there to prevent "car businesses" such as garages and body shops, etc, from being able to use your insurance to cover claims they cause and are soley responsible for. While there are other exclusions that apply to business situations, they are designed to get people to buy the right type of coverage for the actual use of the vehicle, not to keep from paying claims.

If you are going to insult others, and your statement is indeed insulting, at least know what you are talking about. Every industry has bad people willing to do bad things for their own profit, but that is not nearly as often in insurance as it is in other industries.

If you look at the facts, the insurance industry isn't even in the top ten of the "worst" industries that people have filed the most compalints on and have the least respect for. In fact the very industries that we spend the bulk of our claim dollars on are always, I repeat, ALWAYS, in the top five (or should I say Bottom five) of businesses with the worst reputations for dealing fairly and honestly with customers.

As an example, look at the photo of the qtr panel in lumpy bass post. Unless there is some damage not appearing in that photo, there is no way you should have to replace that qtr panel to fix that damage. It is nowhere near the level that would require you to cut out the existing rear qtr section of your SUV and weld a new one on. If it was bolt-on/bolt-off like a fender, it might be different, but to cut out that section for that ding? That's like doing surgery for a scrape and bruise, and the only reason to do this is to make more money on a repair job.

mulchor · #19 08-27-2010, 09:30 AM

I would think the tidy way to work it is to have the LLC pay the deductible, and then when disbursements are made, drop the person's wage by $500.

For the LLC, it's an expense, no problem.

For the person, they get it deducted off the top, and it's invisible even if the IRS auditor comes to call.