My numbers as an O/O leased to Crete

"Electing ADS. Although your property may qualify for GDS, you can elect to use ADS. The election generally
must cover all property in the same property class that you placed in service during the year. However, the election for residential rental property and nonresidential real property
can be made on a property-by-property basis. Once you make this election, you can never revoke it." Publication 946, pg.31.


"The following is a list of the nine property classifications under GDS and examples of the types of property included in each class. These property classes are also listed under column (a) in section B, Part III, of Form 4562. For detailed information on property classes, see Appendix B, Table of Class Lives and Recovery Periods, in this publication.

1. 3-year property

a. Tractor units for over-the-road use." Publication 946, pg. 31


Using ADS, and the example given in Appendix B, you can depreciate over 4yrs. And since I was a start-up business in Aug. '06, I was able to claim only a prorated amount. Thereby, giving my a prorated depreciation the 1st year, full deduction for years 2-4, and a final prorated depreciation in year five.

My head hurts now after all that IRS publication reading. Think I'll take two asprin and read you in the morning.

 

I completely understand your want to use an agressive depreciation schedule. Also, the information about how I was able to utilize a 5 yr schedule will hopefully be benificial to others. This would not have happened if you had not pressed for clarification.

As I've statted before, I welcome any constructive questioning/critics, or insight. I'm interested in a continual education in this arena we call O/O.
For in the end it will make me smarter and stronger as an O/O. And in this tough economic situation, ONLY THE STRONG WILL SURVIVE!

 

1) Already run cost effective recaps.
2) The cost of synthetic oil vs regular mineral based oil is not worth the cost. The reason, in an EGR engine the soot levels are higher, and therefore must still be changed more often. Thus, negating any cost savings.
3) I use the FS2500 Bypass Oil Filter. I change the filter at 10k miles, as per manufacturers instructions, and at 30k have an anylisis done. Usually it's time to change the oil due to soot levels getting high.
4) At 19% idle time the pay off on an APU is way too long. Especially now that the price of fuel has dropped, and considering the cost of maintainance on another engine. Once the reliability of battery operated units improves I may go that route.

Thanks for your reply to the thread, and hope this helps others.

 

You are correct in your thinking. The problem lies with the ULSD and EGR combination. Even with an oil bypass, my oil still seems to get dirty. Maybe it's my bypass filter not doing it's job.?

 

Here is an update for the first quarter of '09.

April 30, 2009

John, following you will find your March 2009 monthly financial statement.

In looking at the March financials, you are showing a Net Profit of $10,522 for the
year-to-date period. This comes out to $0.381 cents per mile and is based on
27,599 paid miles. You are averaging 9,200 paid miles per month this year
compared with 12,045 monthly miles you averaged last year. You were out on
the road 75 days through the end of March 2009 (83% in service) and averaged
368 miles for each day you were out.

Your maintenance expense for the first three months of 2009 was $2,363 or
$0.086 cpm and your tractor supplies expense was $28 or $0.001 cpm. Your
maintenance expense includes tire costs of $760 the month of March. Due to tire
costs your variable tractor expenses are slightly higher than the $0.04 to $0.08
we expect to see.

Fuel costs averaged $0.301 cpm less fuel surcharge reimbursements of $0.158.
This results in a net fuel cost of $0.143 which continues to be a very good net​

fuel cost.

My miles were down the 1st quarter due to slow freight, and I had to take a week off in Jan. due to death in family, and two weeks off at the end of Feb. due to health issue.

Due to the fact I saved money during the good times, I had the nessecary funds to see me through this tough 1st quarter. Not putting monies aside is what usually ends many an o/o's business. Even with the tough 1st quarter, I still have over $16k in my maintainance/rainy day fund.

The end of March, and most of April, I've seen my miles starting to pick back up. I'm expecting a better 2nd quarter.

During this rough economic time I've been able to atleast keep my head above water. 1) I really believe in the power of prayer. 2) I've got a good business partner in being leased to Crete.

 

John, following you will find your April 2009 monthly financial statement.

In looking at the April financials, you are showing a Net Profit of $18,283 for the
year-to-date period. This comes out to $0.440 cents per mile and is based on
41,512 paid miles. You are averaging 10,378 paid miles per month this year
compared with 12,045 monthly miles you averaged last year. You were out on
the road 104 days through the end of April 2009 (87% in service) and averaged
399 miles for each day you were out.

Your maintenance expense for the first four months of 2009 was $2,830 or
$0.068 cpm and your tractor supplies expense was $41 or $0.001 cpm.
Together your variable tractor expenses are right in line with expectations. Fuel
costs averaged $0.303 cpm less fuel surcharge reimbursements of $0.157. This​

results in a net fuel cost of $0.146 which is very good.


April was a much better month, and May is shapping up as well.