Owner/Operator of Semi-Truck Business Expenses

Elle · Joined: 25 Aug 2007 Posts: 15

Joe starts a "for hire" semi-truck transportation business
in 2007. He purchases a semi-truck that year but fails to
make payments. The truck is repossessed in 2007.

So far, I think Joe computes the gain or loss from the
disposition of his truck ("business property") using Form
4797 (Part II), and then reports it on Line 14 of Form 1040.

He will also be completing Schedule C, since before the
truck was repossessed, he did have income from moving
freight with it. He has careful records of his truck's
expenses (repairs, gasoline, etc.) as well as meals on the
road.

Am I missing anything?

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Archived from group: misc>taxes>moderated

Arthur Kamlet · Joined: 25 Aug 2007 Posts: 2053

In article ,
Elle wrote:
>Joe starts a "for hire" semi-truck transportation business
>in 2007. He purchases a semi-truck that year but fails to
>make payments. The truck is repossessed in 2007.
>
>So far, I think Joe computes the gain or loss from the
>disposition of his truck ("business property") using Form
>4797 (Part II), and then reports it on Line 14 of Form 1040.
>
>He will also be completing Schedule C, since before the
>truck was repossessed, he did have income from moving
>freight with it. He has careful records of his truck's
>expenses (repairs, gasoline, etc.) as well as meals on the
>road.
>
>Am I missing anything?

If he has an NOL does he want to carry back or does he want to
forego the carryback and go forward? To forego the carryback is
an election.

And you correctly omitted the depreciation angle. None here.
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ArtKamlet at a o l dot c o m Columbus OH K2PZH

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Elle · Joined: 25 Aug 2007 Posts: 15

"Arthur Kamlet" wrote
> If he has an NOL does he want to carry back or does he
> want to
> forego the carryback and go forward? To forego the
> carryback is
> an election.

Following the lead above, I am using Pub 536 for
elaboration. I will weigh his past tax returns and the
effects of spreading this NOL over them. Same for expected
future earnings. I think it is possible I might be able to
spread the NOL over the last few years and improve his EIC,
due to two kids etc., but I do not think it would improve by
much. Plus I am doing this pro bono and have limited time to
master this subject area. I will double check the numbers,
then offer to him that he might do better going to a paid
preparer, though the cost of the paid preparer may offset
any gain he would have. So far I think the NOL will be small
relative to his other income for 2007, in which case it
seems to me he will want to strongly consider applying the
entire loss to 2007 and be done with it.

If you think I am missing something, please chime in.

Thank you very much for your help.

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