1. taking clients on trips in the RV and deducting it as entertainment and,
2. being a contractor, using the RV while he is working on jobs out of town. He owns the RV personally but his business is an S corp so he wanted to know if he could have the S Corp pay rent to him when it's used for business purposes which would then be deductible.
A. I'll do my best:
1. If he can verify he actually takes a client on a trip & returns, he might be able to get away with the actual costs. Since depreciation isn't allowed & is also included in the mileage method, I don't see any way other than taking actual costs. This also may or may not be allowable in the event of an audit.
2. He won't be able to deduct any costs acting as a contractor.
3. If he pays rent through the business, he will need to claim the rent on his personal taxes, so he will have a net sum of zero.
Regrettably he's in a tough position. According to the Jackson case, the IRS views RVs as personal vehicles designed for pleasure only. Business use is no longer an option.
Wishing you & your clients a productive tax season! Honey