Expensing firearms and fees

F5guy · Aug 19, 2018

Seems to me a business owner who is granted wear and carry for business is entitled to expense firearms, training, fees, belts holsters, safe and ammo. Has this been discussed previously ?

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Occam · Aug 19, 2018

Businesses certainly expense their security systems, the miles they spend making bank runs, etc. I'm no accountant or lawyer, so I'm just musing here ... but one thing that comes to mind is that items bought by the company are company property (assuming, here, we're talking about an LLC or INC, etc) but the firearm is most typically owned by the individual. Need to be cautious about the business appearing to pay for things that the business can't/doesn't possess. Something tells me there's some legal jeopardy just waiting to happen in there somewhere.

F5guy · Aug 19, 2018

Good point, may work more effectively for a sole prop. I do of course intend to discuss with a professional.

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Occam · Aug 19, 2018

Ammo, range time, training, fees (like the W&C process) seem a lot easier in that regard. It's just the shootin' iron that screams caution, for me.

Biggfoot44 · Aug 19, 2018

If carrying/ using a firearm is part of your job, range time, ammo, training, etc ( and holsters, related gear, ballistic vests, etc)is definitely deductable .

Actual firearm can be trickier . You would need to convincingly show that the particular firearm is used strictly for job purposes, and not used for, or suitable for personal use on your own time .

Added - After looking at thread title more closely , need to add , the above is in regards to personal income taxes .

If the thread is actually about the business entity's books, and not you as an individual , the training , and practice to maintain proficiency costs should be business expenses ( providing said training is plausably related to job duties ).

Actual firearms would be trickier, as then matters over ownership of said firearms . Consult your tax lawyer .

CrazySanMan · Aug 20, 2018

My tax guy tells me every year that since I have a security clearance and occasionally work from home my firearms and ammo purchases are tax deductible, as would be any expenses for a security system.

StantonCree · Aug 20, 2018

Occam said:
Ammo, range time, training, fees (like the W&C process) seem a lot easier in that regard. It's just the shootin' iron that screams caution, for me.

My old CPA told me to write all this stuff off as training lol

Bigsawer · Aug 20, 2018

mpdc4511 said:
My old CPA told me to write all this stuff off as training lol

Is that why he's your "old" CPA?

fabsroman · Aug 20, 2018

mpdc4511 said:
My old CPA told me to write all this stuff off as training lol

You are a police officer, not a person that is granted a CCW for business purposes. Somewhat of a difference there.

The requirement for something to be expensed is that it must be reasonable AND necessary for a person/entity to carry on business. If the amounts weren't outrageous, I wouldn't see any issue with a business owner deducting some ammo and range time. The question ends up being how much is reasonable and necessary. Is the owner also competing in 3 gun matches, or other types of matches? How much ammo and range time are we talking about here? How much is necessary for a business owner to be able to protect himself while conducting business? Next, the actual facts had better support it too. For instance, if a CCW is granted to the business owner because the business owner makes cash deposits, there had better be a decent number of cash deposits being made.

Had somebody at a gun show flaunt his CCW to me. Said he was a business owner and that he was given the CCW with the restriction that it was only to be used while conducting cash transactions. Then, be ever so smart he pulled out a check, told me that he always has a client check on him, and that he is always going to a bank to make a deposit. That is all fine and good, but if push comes to shove those bank statements will show exactly how many deposits have been made.

Everything is fine and good until there is an audit. Then...………

Oh yeah, if the business is an LLC, Corp, etc., it can reimburse an employee/member/owner for reasonable AND necessary business expenses. The entity just needs to have a reimbursement policy in place that is adhered to.

fabsroman · Aug 20, 2018

CrazySanMan said:
My tax guy tells me every year that since I have a security clearance and occasionally work from home my firearms and ammo purchases are tax deductible, as would be any expenses for a security system.

Yep, and I have seen tax returns where gym memberships are expensed for law enforcement officers, along with razor blades, shaving cream, and haircuts "because they must maintain a professional appearance", and $1,000 watches "because they are required to know the time as part of their job". I have had a car salesman ask me to deduct his suits because he had to buy them for work. I told him that the requirement for deducting clothing is that the clothing must be specific to work and not able to be worn outside of work. His reply to me, "but I don't wear the suits outside of work." My response, "but would it be unusual for you to wear a suit out of work? Could the suits be worn to church? Could they be worn to other functions or for other matters?" His response, no they could not. His wife wanted me to deduct the repairs on their kitchen sink because "the neighbor deducted the repairs to their kitchen sink."

I have seen some pretty screwed up tax returns prepared by actual enrolled agents, CPAs, and attorneys. They tell the client whatever the client wants to hear because they want to make that fee. Just realize that when you sign on the dotted line, you are personally responsible for the income tax return. It wasn't Wesley Snipe's tax preparer that went to prison.

Quick google search came up with these links that discuss the matter:

https://www.avvo.com/legal-answers/can-i-deduct-the-following-on-my-llc--cost-of-self-1422918.html

https://www.americanbar.org/groups/gpsolo/resources/solosez/popular_threads_2010/103010thread1.html

The expense must be "ordinary and necessary" for the business. Think I used the wrong buzz words in my previous post.

ras_oscar · Aug 21, 2018

Biggfoot44 said:
If carrying/ using a firearm is part of your job, range time, ammo, training, etc ( and holsters, related gear, ballistic vests, etc)is definitely deductable .

Actual firearm can be trickier . You would need to convincingly show that the particular firearm is used strictly for job purposes, and not used for, or suitable for personal use on your own time .

Added - After looking at thread title more closely , need to add , the above is in regards to personal income taxes .

If the thread is actually about the business entity's books, and not you as an individual , the training , and practice to maintain proficiency costs should be business expenses ( providing said training is plausably related to job duties ).

Actual firearms would be trickier, as then matters over ownership of said firearms . Consult your tax lawyer .

IANAL, but I would think that IF your W&C permit was restricted to business type uses, anything related to W&C would be a legitimate deduction.

Biggfoot44 · Aug 21, 2018

A Desert Eagle, or 10.5in Blackhawk would raise eyebrows . Likewise a class specifically geared to 3 gun, where 2/3 would not at all apply .

But my original intent was to point out that almost everything would count .

PharaohF4 · Aug 22, 2018

I expensed a ccw holster. My CPA questioned it and I said the state only allows me carry while doing my Sole Proprietor company so to me its arguable for work only.

fabsroman · Aug 22, 2018

PharaohF4 said:
I expensed a ccw holster. My CPA questioned it and I said the state only allows me carry while doing my Sole Proprietor company so to me its arguable for work only.

The expense must be "ordinary and necessary". Just because MSP says you can have a firearm for self defense only while conducting business does not mean that having a firearm for self defense is "ordinary and necessary" for your business.

I would challenge my client to show me how having a firearm is considered "ordinary" for the trade and then how it is considered "necessary" for the business. For instance, I am an attorney. Is it ordinary for attorneys to CCW? Is carrying concealed an ordinary thing for attorneys? Now, it might very well be necessary for me, but it still is not ordinary for the profession. If the client insisted on taking the deduction and I thought it was a grey area, I would send the client an e-mail stating that I think it is a grey area, that I would put it on the return, but that I would not be responsible for any interest/penalty if the deduction ended up being disallowed.

Not_an_outlaw · Aug 22, 2018

fabsroman said:
The expense must be "ordinary and necessary". Just because MSP says you can have a firearm for self defense only while conducting business does not mean that having a firearm for self defense is "ordinary and necessary" for your business.

I would challenge my client to show me how having a firearm is considered "ordinary" for the trade and then how it is considered "necessary" for the business. For instance, I am an attorney. Is it ordinary for attorneys to CCW? Is carrying concealed an ordinary thing for attorneys? Now, it might very well be necessary for me, but it still is not ordinary for the profession. If the client insisted on taking the deduction and I thought it was a grey area, I would send the client an e-mail stating that I think it is a grey area, that I would put it on the return, but that I would not be responsible for any interest/penalty if the deduction ended up being disallowed.

I wonder if an insurance analysis would work. You don't really need it, but its ordinary and necessary. And I should add that in places like VA, it's ordinary to carry.

fabsroman · Aug 22, 2018

Not_an_outlaw said:
I wonder if an insurance analysis would work. You don't really need it, but its ordinary and necessary. And I should add that in places like VA, it's ordinary to carry.

If you don't need it, how can it be necessary?

Not_an_outlaw · Aug 22, 2018

fabsroman said:
If you don't need it, how can it be necessary?

Don't play the lawyer game with me. Maybe I should have stated, it's not legally required, but I maintain it to protect my interest. Is that better.

Stoveman · Aug 22, 2018

fabsroman said:
The expense must be "ordinary and necessary". Just because MSP says you can have a firearm for self defense only while conducting business does not mean that having a firearm for self defense is "ordinary and necessary" for your business.

I would challenge my client to show me how having a firearm is considered "ordinary" for the trade and then how it is considered "necessary" for the business. For instance, I am an attorney. Is it ordinary for attorneys to CCW? Is carrying concealed an ordinary thing for attorneys? Now, it might very well be necessary for me, but it still is not ordinary for the profession. If the client insisted on taking the deduction and I thought it was a grey area, I would send the client an e-mail stating that I think it is a grey area, that I would put it on the return, but that I would not be responsible for any interest/penalty if the deduction ended up being disallowed.

I would argue that a prosecutor would consider it necessary.

fabsroman · Aug 22, 2018

Stoveman said:
I would argue that a prosecutor would consider it necessary.

How many prosecutors do you know with a CCW? The only one that I know of that tried to get one, was trying to get one because he was receiving death threats from the 2A community. I know several prosecutors in HoCo and none of them have a CCW. So, is it even "ordinary" for a prosecutor to CCW?

Remember, it has to be ordinary and necessary.

fabsroman · Aug 22, 2018

Not_an_outlaw said:
Don't play the lawyer game with me. Maybe I should have stated, it's not legally required, but I maintain it to protect my interest. Is that better.

lol - it is all about semantics.

The standard is "ordinary and necessary". Maybe we should make the argument that everybody and their mother needs to protect their interest, both their life interest and property interest, so everybody should be able to deduct firearms and ammunition, not just business owners and people wherein it is absolutely necessary to have a firearm for work. It should actually be an allowed miscellaneous deduction on Schedule A.

Expensing firearms and fees

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