Vehicle over 6,000 lbs

Can you use the standard mileage rate on a vehicle weighing greater than 6k lbs?

What do you think of RP 2010-51, section 3.01(1)?

I think it is a hard read. I need something written for dummies. LOL

This is an S-corp that does not own the vehicles. Chevy Suburban and a Ford F250 Truck. President is using both for business. The Chevy is new for 2019. Purchased in 2019. He is the only member of this S-Corp. I am stuck with actuals for the F250 as actuals have been used in the past. Possibly because it was over 6k lbs? There is no depreciation since the S-Corp does not own the vehicles.

He does not have a written accountable plan, however, I don't think the IRS requires it to be written. Correct me if I am wrong. Verbal, I think is acceptable. Would you recommend something in writing?

S-corp pays all the gas, repairs. He has the other usual expenses paid from personal account. We are not taking loan interest. He gave me odometer readings and wants to claim 75% business use. I can show the 75% in the books and can recharacterize draws to reflect other reimbursements.

I know he needs a mileage log to account properly. I will insist on it. I realize that without it, we must add the non-accounted reimbursement to his wages.

He also has an office in home. Accounting for that seems straight forward. No simplified Safe Harbor and no depreciation. I know without the accountable plan, he can't take this deduction, either.

What have I missed? Is it OK to come up with the "accountable plan" now for 2019? Is there a reason not to do cents per mile on the Chevy?

What else should I be thinking about? S-corps are not my specialty. He has closed it out, so this is the final year. No W-2, so I am issuing a 1099 to him. Going to Sole Proprietor. Less than 60k gross. S-Corp is not worth the hassle and he doesn't do as instructed.

The standard mileage on the Chevy is going to give him a really large deduction as compared to the actuals. That is why I want to make sure we can do it. Of course, he must have the accountable plan irregardless of whether he does actuals or the standard mileage rate. It all seems to hinge on the "Accountable Plan".

Please let me know what I missed, any reason why I shouldn't do cents per mile on the Chevy and how you would proceed with getting the "Accountable Plan" in place. Thanks in advance. Sorry to ramble.

I found this while researching: Not sure I understand it. Help!

To compute the allowance under a fixed-and-variable-rate (FAVR) plan, the maximum standard automobile cost is $50,400 for 2020 for all automobiles (including trucks and vans), the same as in 2019. The FAVR amounts were recalculated in 2018 after the TCJA retroactively amended the bonus depreciation rules. Under a FAVR plan, a standard amount is deemed substantiated for an employer’s reimbursement to employees for expenses they incur in driving their vehicle in performing services as an employee for the employer.

Bell, my point is that the section I quoted includes vans and pickups in the definition. Others may have a different view as to whether large SUVs are included in that definition.

More telling is section 4.05 in the link you posted.

He has closed it out, so this is the final year.

Personally, I would ignore the 2019 Chevy Suburban purchase and record the business expenses and depreciation of the truck. There is no depreciation for §1245 asset purchased and sold in same tax year. If there are legit expenses for the Suburban, I might include those operating costs. The distribution of the vehicle could be problematic. Loss??