What would your recommend???

I'm in a bit of a quandry on what to do.

As many of you know I am self employed landscaper. I try to buy a couple pieces of more expensive equipment every year. Well on DH's recommendation I bought (in business name) a power pole pruner. Its basically a small chainsaw blade on a pole like a string trimmer. I will not be using it for my clients until late winter/early spring. This cost almost $500.

Well Neil went up to the farm this morning and took it along to prune up trees growing near the fence lines so when fieldwork is done the guys driving the tractors won't get wacked in the face by low hanging branches.

Our farm is owned by DH & two of his brothers. Actually since the land is rented out they formed an LLC a couple of years ago.

I told him that I am going to bill him for "rental" of my equipment and he laughed!! I told him I was serious as he is depreciating my equipment.

So what should I do? They would not be able to trim the trees without a piece of equipment like this.

I honestly don't know. I borrowed my dad's pressure washer from their business and used it to pressure wash my house. He didn't charge me rental fee.

My husband never charges them for computer service or even when he helps with maintenance on the place.

I guess we just look at it as being family.

Originally Posted by snosrap5

I honestly don't know. I borrowed my dad's pressure washer from their business and used it to pressure wash my house. He didn't charge me rental fee.

My husband never charges them for computer service or even when he helps with maintenance on the place.

I guess we just look at it as being family.

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same here, in my family it would just be a favour.

If he broke it, I would expect their LLC to replace it, but for use for a day, the depreciation would be minimal?

Perhaps if you have an agreement signed between your company and Neil's LLC to make sure there is an understanding that they are using your equipment and will be held responsible.

Keep in mind too that if you do charge them, you can't make exceptions for anyone borrowing the equipment. Perhaps just ask for a small fee?

I can see your quandry though. sometimes family just assume that they have whatever rights to your business' equipment and that weird line between family and business needs to be drawn.

As you stated, you are depreciating this asset, therefore, if you don't charge him for rental use b/c "family"... the percentage you use this asset for business would not be 100% (if that is what your dep. is at) and could limit you and not be able to take a Section 179 Expense (if you opt to do that)

Keep in mind.... if it won't be placed in service until next year.... then business use will not be affected (100%) nor will it be on your 2007 taxes including expense which could be affected if your cash basis or accural method... I would have to look that one up...

If your only reason for charging rent is worrying about 100% business use... you shouldn't worry... they don't have to be.

Cars are great example...

What is it that your exactly worried about???

Link below w/ more detail...
http://www.irs.gov/businesses/small/...137026,00.html