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Owner/Operator of Semi-Truck Business Expenses

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?

Reply to
Elle
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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.

Reply to
Arthur Kamlet

"Arthur Kamlet" wrote

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.

Reply to
Elle

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