Temporary job - Expenses

[neilbrink]

Client worked at an out of area temporary worksite for 4 months in 2008. While there, the company paid him rent for the use of his truck as well as wages. He received a 1099 for the rent amount. Can he deduct any of his living expenses while at the worksite from this rent amount? Obviously, the client had to be at the site with the truck in order to receive the rent. Is this reasonable?

[imjulier]

My 2 cents...

Can't deduct living expenses from the rent amount but can claim these on form 2106 assuming wages were paid in w-2. I would think the truck exepnses could be deducted from the rent received for the truck though. Gas, insurance, depr, repairs and maintenance. I wouldn't think that the standard mileage rate could be used in this scenario though. We'll see what others think.

Julie

[neilbrink]

Thanks, Julie. My thought process was that since he had to be there in order to receive the truck rent, then his living expenses should be considered. Also, I have calculated the expenses using the form 2106 but after all the deductions, he did not have enough expenses to itemize. (Single person, not enough other expenses to qualify). I was looking for other ways to deduct those expense items.

[imjulier]

Your response makes sense and seems logical. Maybe you can check if any of this is in writing because rental of a truck doesn't seem to include rental of a person to me....and to prove it, he was paid wages.

I'm still interested in finding out others thoughts.

Julie

[LindaB]

Client worked at an out of area temporary worksite for 4 months in 2008. While there, the company paid him rent for the use of his truck as well as wages. He received a 1099 for the rent amount. Can he deduct any of his living expenses while at the worksite from this rent amount? Obviously, the client had to be at the site with the truck in order to receive the rent. Is this reasonable?

There was some discussion on this on the old ATX message board, I think. It seems like the consensus was that the 1099 showing truck rent was actually reimbursement for his travel expenses, so he would have to list actual expenses on form 2106 and show the 1099 amount as reimbursement.

[RitaB]

There was some discussion on this on the old ATX message board, I think. It seems like the consensus was that the 1099 showing truck rent was actually reimbursement for his travel expenses, so he would have to list actual expenses on form 2106 and show the 1099 amount as reimbursement.

Yes, I think you are right, Linda. I would also show the 1099-Misc amount as income on Sch C, with an explanation like "Employer reimbursement properly reported on Form 2106" deducting the same figure under "other deductions." Otherwise, he'll get letter in two years asking why you didn't report the 1099 income. One time I tried to handle this by including an explanation on the 2106. They didn't see it.

[neilbrink]

In this particular case, expenses for the employeewere paid separately. This amount was specifically rentfor the truck, and was listed as "Rent" on the 1099. The rent was for his using his truck to haul some of the supplies needed from the supply yard to the worksite. I certainly can see taking the milage expense deduction against the "Rental" Income, since the truck was specifically being used for that purpose. But, wasn't my client also required to be present at this job to drive the truck as well as to do the other required work?

Thanks.

Neil