Thursday, May 21, 2015

Deductions for Volunteers

Q.  My spouse and I are volunteers at a State Park, approximately 300 miles from our home for 6 weeks. We are not full timers, and are paying for our own travel expenses, meals, plus providing supplies for me to run their Interpretive program and arts/crafts.  Also, I use my POV to distro activity flyers each week at seven locations throughout the park. We also use POV to drive 14 miles RT to obtain supplies, run errands (I paid $55 to print and laminate posters and teaching materials). 

We are keeping gas receipts and logging about 15 miles/day 3-4 times each week. Park provides a RV site, uniform shirt, but we had to purchase work pants, shoes, gloves plus lots of bug spray. 

What are our possible IRS allowable deductions?

A.  Travel from your home to your work place is considered "commuting" and therefore is not a deduction. However, the mileage you put on your POV for business purposes is deductible. In order to take the deduction you must have a log book, kept on a contemporaneous basis showing the mileage & business purpose for your mileage. Personally I keep a little pocket calendar in the glove box of my car during the tax filing season to keep track of mileage for numerous trips to the post office and banks, and the occasional trips to business clients. The IRS is very strict about this: no log, no deduction!

All of your out-of-pocket costs for supplies are deductible. The costs of your uniforms which I know are required are also deductible. The really good news is that the use of your parking space is considered to be for the convenience of your employer, and therefore a tax free benefit! 

Thanks for being a volunteer at one of our beautiful state parks. We just left Valley of the Rogue State Park in OR yesterday and enjoy every minute of our stays in the few state parks where a big rig can fit! Thanks also for writing and stay safe.

Monday, May 18, 2015

What Exactly is an RV Lot?

Q.   I just found your Blog. It is tremendous and has excellent advice.
I am hoping you can lead me in the right direction with my question.
I owned an RV site. I bought it in 2006 and used it personally until 2011. In 2011 I converted it to full time RV site rental use. It has been in a rental program managed by the park company (they work for the owners) since then. It has a concrete pad, a small dog house with electrical links and a small storage shed. It has had no personal use since 2011. I sold it in 2014 at an approximately a 50% profit.
The Federal tax books identify all sorts of properties that one may own and how to treat them tax wise - residential, real, and etc. However, they do not mention RV site.
I am struggling with how to label the property and what forms to use for the sale. Do you have any suggestions?

A.  RV lots are like any other lot anywhere: real property. Improvements are just that. When you sell your RV lot, your tax basis would be the purchase price together with the cost of purchase along with the capital improvements you added to your lot. In this case you added a concrete pad, dog house, a storage shed, and electrical connections. The total of this becomes your "tax basis" and when deducted from your net selling price results in either a capital gain or loss. This is reported on form 8949 and ultimately Form 4797 (if you took any depreciation on the capital improvements) and Schedule D. Thanks for a good question!