Semi Truck & Trailer

[dbookkeeping25]

I have a client who is a 1099'd truck driver and he leases a trailer for his cattle hauling business. How do I write off the lease payments? 

[dkh]

What kind of lease?   Do they own the trailer at the end of the lease or have an option to purchase at a reduced price?

[dbookkeeping25]

It's a private lease from his parents. This was 2 years ago, so he is not going to own or didn't buy it from them.

[IRonMaN]

But that didn't answer the flower lady's question.

[dkh]

Never going to own. So he's just renting the trailer.    

[dbookkeeping25]

I guess yes technically, sorry.

[dkh]

I don't use ProConnect but a Sched C should be the same no matter what software.....Find where you enter Rent or Lease of equipment.

Taxpayer should issue a 1099 to parents for amount paid for leasing the trailer.

[dbookkeeping25]

Would I add it as 'Vehicle 2"?

[dkh]

It's not a vehicle.   It's not an asset if the taxpayer has no ownership.    Based on your information, the taxpayer has an expense of renting a trailer. 

[dbookkeeping25]

Oh yes, okay! Thank you.

[George4Tacks]

It sounds like a business expense called RENT. In ProConnect if you want to itemize the various vehicle expenses including RENT, you start with 2106 and link it to the schedule C. 

He needs to issue a 1099 to his parents. 

[qbteachmt]

Specifically, if he hadn't already done so, he is late issuing a 1099-Misc with box 1 rent. He's in the "up to 30 days late" penalty range right now.