Would this be fully deductible as business expense?

[jayone1]

What is the name of your state? IL

I have a company that sells automotive accessories/parts. From time to time we rent cars (from like Enterprise, etc.) and take pictures of the parts on the car and then return the cars. I assume the price of the rental is fully deductible as a business expense? Thank you.

[HomeGuru]

Originally Posted by jayone1

What is the name of your state? IL

I have a company that sells automotive accessories/parts. From time to time we rent cars (from like Enterprise, etc.) and take pictures of the parts on the car and then return the cars. I assume the price of the rental is fully deductible as a business expense? Thank you.

**A: why do you need to actually rent the cars to take the photos? And what purpose asisde from taking photos are you using the vehicles for?

[irsos]

Originally Posted by jayone1

What is the name of your state? IL

I have a company that sells automotive accessories/parts. From time to time we rent cars (from like Enterprise, etc.) and take pictures of the parts on the car and then return the cars. I assume the price of the rental is fully deductible as a business expense? Thank you.

Yes, the expense is deductible. However, if you use them for personal use, a portion of the rent would not be deductible. As a practical matter, that woud be hard to prove.

[tranquility]

The test is ordinary *and* necessary expense of doing business. If you can make a case that such treatment fits that test, then it is deductible. You have not made that case yet. Why do you take pictures of the parts? How does that help your business? Is there any personal use involved?

[irsos]

Originally Posted by tranquility

The test is ordinary *and* necessary expense of doing business. If you can make a case that such treatment fits that test, then it is deductible. You have not made that case yet. Why do you take pictures of the parts? How does that help your business? Is there any personal use involved?

I don't think you have to be too creative to make the case for ordinary and necessary.

[jayone1]

The cars are not used for personal use at all. They are driven probably 4 miles total...to the photoshoot and back to the rental place.

Why do we take pictures of the parts? Would you buy something if you didn't know what it looked like? It is very necessary and ordinary IMHO.

[tranquility]

I don't think you have to be too creative to make the case for ordinary and necessary.

I agree it would not be very heavy lifting. But, such lifting must still be done. When a person has confusion about whether something is deductible, unless I have knowledge of what they do exactly, I let them know the rule.

The cars are not used for personal use at all. They are driven probably 4 miles total...to the photoshoot and back to the rental place.

Why do we take pictures of the parts? Would you buy something if you didn't know what it looked like? It is very necessary and ordinary IMHO.

If you have the parts, why do you need to go to Enterprise to rent the car? I'm not trying to be difficult, I'm just saying it seems a little unusual. The way I'd analyze this by using what you've said so far, is that the expense is *necessary* because our business model has people wanting to know what they buy so we need a picture for our catalog/website/whatever. It is ordinary because most people in the parts selling business show the part in a vehicle to give an example of how it will be in the field.

[irsos]

Originally Posted by tranquility

I agree it would not be very heavy lifting. But, such lifting must still be done. When a person has confusion about whether something is deductible, unless I have knowledge of what they do exactly, I let them know the rule.


If you have the parts, why do you need to go to Enterprise to rent the car? I'm not trying to be difficult, I'm just saying it seems a little unusual. The way I'd analyze this by using what you've said so far, is that the expense is *necessary* because our business model has people wanting to know what they buy so we need a picture for our catalog/website/whatever. It is ordinary because most people in the parts selling business show the part in a vehicle to give an example of how it will be in the field.

I am sure that they do not stock every part on earth so they have pictures of the ones they do not stock.

[tranquility]

I am sure that they do not stock every part on earth so they have pictures of the ones they do not stock.

Um...

I have a company that sells automotive accessories/parts. From time to time we rent cars (from like Enterprise, etc.) and take pictures of the parts on the car and then return the cars.

It seems like they have them in stock. If questioned by an auditor, I refer back to my previous answer.

[irsos]

Originally Posted by tranquility

Um...

It seems like they have them in stock. If questioned by an auditor, I refer back to my previous answer.

No, they do not have them in stock or they would not need pictures of them to show to would-be customers. The whole premise of the question is based on the fact that they need the pictures because they do not have the part. Do you think they would go to the expense of renting a car if they had the part on the shelf behind them? Um..

[abezon]

Originally Posted by irsos

I don't think you have to be too creative to make the case for ordinary and necessary.

Ordinary = bona fide business purpose for the expense [37 TC 650]
Necessary = helpful to the business [290 US 111]

I doubt the IRS would even question the ordinary & necessary expense of allowing customers to see a picture of what they're ordering. Otherwise catalogs wouldn't be deductible. You renting the car is like Ralph Lauren hiring a fashion model for a photo shoot -- shows off what you're selling.

I do recommend you make sure all rental agreements show the mileage in & out, as this is the best evidence that the car was only driven to the photo shoot & not for personal time.