Clients formed an LLC in early 2011 for a livery service (will be taxed as partnership). There is one vehicle, purchased specifically for the business. Major partner who runs the business has personal miles as well as business miles on this car.
How do I account for the personal miles? "Guaranteed payment to partner" at standard mileage rate? Apportion expenses by business use percentage? Some other form I haven't been able to find to show personal miles as income to the driving partner?
TIA,
Catherine
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Livery service
Started by Catherine, Feb 06 2012 10:40 AM
5 replies to this topic
#2
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ATX Supreme Guru
Posted 06 February 2012 - 12:56 PM
Don't know how to report. But, do know that guaranteed payments should be designated in the operating agreement, something like $/month, or cost of health insurance, or 5000 miles on company car, or.... So, maybe distribution to partner. Probably have to use actual expenses and not SMR. Does partnership own vehicle? If partner owns, then an accountable expense plan and partner could use SMR.
#3
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ATX Guru
Posted 06 April 2012 - 04:02 PM
Anyone else want to weigh in on this? Partnership owns vehicle. Agreement has nothing about miles/use of car -- but personal use is substantial.
#4
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ATX Master
Posted 08 April 2012 - 12:03 PM
There is an IRS chart "Annual Lease Value Table" in Pub 15B to calculate personal use of a company owned vehicle and add amount to "Guaranteed payment to partner".
#5
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ATX Guru
Posted 09 April 2012 - 07:58 AM
Thanks, OldJack -- will go look that up now.
Catherine
Catherine
#6
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