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DEPRECIATION CAR FOR SCH C

HOPE2
Level 8

Hi everybody. Hope all you guys be healthy the colds come. My new client is software engineer, machine learning. He made around $8500 and some expense included computer and .... around $2500. He wants to have actual expenses for his Tesla car which is almost $67000 and he bought this car 06/01/2022. Also he has two cars and the other car he uses for W-2 job.

Can I use full dep for Tesla car, the big loss would be in Sch C's result. I am not sure this big loss may cause some problem.  

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1 Solution

Accepted Solutions
abctax55
Level 15

LOL.... a favorite joke of mine:

*************

Bridge to Hawaii

A man walking along a California beach was deep in prayer. All of a sudden, he said out loud, "Lord, grant me one wish."

The sunny California sky clouded above his head and in a booming voice, and the Lord said, "Because you have tried to be faithful to me in all ways, I will grant you one wish."

The man said, "Build a bridge to Hawaii so I can drive over anytime I want."

The Lord said, "Your request is very materialistic. Think of the enormous challenges for that kind of undertaking. The supports required to reach the bottom of the Pacific! The concrete and steel it would take over thousands of miles! I can do it, but it is hard for me to justify your desire for worldly things. Take a little more time and think of another wish, a wish you think would honor and glorify me."

The man thought about it for a long time. Finally he said, "Lord, I wish that I could understand women. I want to know how they feel inside, what they are thinking when they give the silent treatment, why they cry, what they mean when they say " nothing!", and how I can make a woman truly happy."

The Lord replied, "You want two lanes or four lanes on that bridge!

"*******Tax software is no substitute for a professional tax preparer*******
( Generic Comment )"

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18 Comments 18
sjrcpa
Level 15

It's gonna stick out.

He has a log showing total miles, business miles and personal miles?

How much business use % is he trying to claim>


Ex-AllStar
TaxGuyBill
Level 15

Depreciation for vehicles is complicated.  The the first two things you need to know are:

  1. Is it an under 6000 pound or over 6000 GVWR/weight vehicle (is this a Tesla Model X, or is it one of the other models?) and
  2. Percentage of business use.

 

Until we know those two items, we can't really tell you much about the depreciation.

Terry53029
Level 14
Level 14

If your client is not trying to scam the system never hesitate to take all deductions entitled to. Be sure, and inform him of the records required. Here is a link for you to check out the rules for business use of car.

 https://www.irs.gov/taxtopics/tc510

IRonMaN
Level 15

How many business miles can the guy have to generate $8500 of revenue?


Slava Ukraini!
BobKamman
Level 15

Back during the real estate recession, there were plenty of agents who were doing that much driving and not collecting any commissions.  Maybe this guy has an office in the home, and only drives to the offices of his customers, who are start-ups promising to pay him next year.  Or maybe, he bought a magnet sign for the car and now believes it is fully deductible as advertising.  I would have to look it up, do you get the EV credit for a business-use vehicle?  Isn't it reduced?  In any case, it reduces cost basis.  

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HOPE2
Level 8

Tesla did not have EV credit in 2022.  Business use is 51%.

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HOPE2
Level 8

Thanks a lot. Business use 51%.

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HOPE2
Level 8

Thanks, I already read it but my question is when we have $8500 gross income after deduction expenses based actual method then dep the car for 51% business use of that, big loss number pops out. 

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HOPE2
Level 8

Thanks, based on business miles, personal miles business use is 51%.

Also, he has two cars.

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PATAX
Level 15

@sjrcpa 👍👍👍 exactly right.

PATAX
Level 15

@IRonMaN 👍👍👍 maybe he drove back and forth to Hawaii on business?😉😁

sjrcpa
Level 15

There was a case awhile ago where a clergy member was claiming business miles driven - including to Indonesia, I believe.


Ex-AllStar
IRonMaN
Level 15

Must have been a duck boat.  Lots of seating, no problem on water, but I'm guessing the mileage kinda sucks.


Slava Ukraini!
PATAX
Level 15

@sjrcpa yeah I remember reading about that too. If my memory serves me right the pastor may have also been the head of the Space Program (like NASA) for the Principality of Andorra. But I may be wrong.😉😁

abctax55
Level 15

LOL.... a favorite joke of mine:

*************

Bridge to Hawaii

A man walking along a California beach was deep in prayer. All of a sudden, he said out loud, "Lord, grant me one wish."

The sunny California sky clouded above his head and in a booming voice, and the Lord said, "Because you have tried to be faithful to me in all ways, I will grant you one wish."

The man said, "Build a bridge to Hawaii so I can drive over anytime I want."

The Lord said, "Your request is very materialistic. Think of the enormous challenges for that kind of undertaking. The supports required to reach the bottom of the Pacific! The concrete and steel it would take over thousands of miles! I can do it, but it is hard for me to justify your desire for worldly things. Take a little more time and think of another wish, a wish you think would honor and glorify me."

The man thought about it for a long time. Finally he said, "Lord, I wish that I could understand women. I want to know how they feel inside, what they are thinking when they give the silent treatment, why they cry, what they mean when they say " nothing!", and how I can make a woman truly happy."

The Lord replied, "You want two lanes or four lanes on that bridge!

"*******Tax software is no substitute for a professional tax preparer*******
( Generic Comment )"
TaxGuyBill
Level 15

I love that joke too!

IRonMaN
Level 15

An oldie but a goodie.


Slava Ukraini!
HOPE2
Level 8

By this joke I accepted the s😂olution.😂😂😂

The best of the world's joke.

But I remembered he has been working on marketing so client first year he made $3200 and he drove thousands miles around the California went to business met owners in person he was good at talking and convincing so next year he made $95000.