Have a couple questions for those who are familiar with taxes for clients in the network / multi level marketing business. Have client (MFJ with three young children) who earn 100% of their family income (about $140K) via multi level marketing. They plan to buy a truck plus trailer/RV when their current lease ends, and travel the US for a year. Aw, freedom. Now they're trying to project the tax advantages available to them, because, you know, all those YouTube videos say you can write off just about everything in multi level marketing!
Serious question:
(1.) How would business miles be calculated in such a case? Their tax home would be ... the state they left? Once they set off into American the Beautiful for a year, most all of their miles would be personal. Occasionally they could meet with a current distributor and/or meet with a prospective distributor or customer, But how would you track the business miles (ie., from what starting point?)
(2.) What would be considered "travel"? Typically they incur flight, hotel, etc costs to go the annual company convention ... but if they're already on the road in the RV, and stop in at a convention site, where did the travel start from?
(3.) How would you figure business use percentage should they buy a truck and want to claim the big Section 179 deduction ($25,000 for 6,000 GRVW)? If it goes below 50% (which is likely) won't the deduction get taken back via depreciation recapture?
P.S. Any other strategies or ideas around how to maximize their dreams and at the same time minimize their tax liability are appreciated.