Can I write off my car?
February 2, 2006 4:52 PM Subscribe
Can I write off all or part of my car purchase? While it will be used to ferry me about, it is primarily being purchased as a test vehicle at my non-profit workplace (engine/battery modifications), where I serve as a consultant.
I am absolutely purchasing this car because it will be tested on in our garage. Just wondering if I need to write this off simply as a "car" used for work, or if it falls under materials or something else.
I am absolutely purchasing this car because it will be tested on in our garage. Just wondering if I need to write this off simply as a "car" used for work, or if it falls under materials or something else.
I hate to state the obvious, but rather than soliciting advioce for a question like this - where following the wrong answer could be very, very costly - to a bunch of essentially random folks, why don't you just ask an accountant? I bet that the non-profit for which you work has one. Every non-profit I worked for did.
(BTW, just so there's no misunderstanding, I'm not saying that devilsbrigade's answer is in any way wrong. It's actually what I would guess. I would just recommend professional advice.)
posted by robhuddles at 9:28 PM on February 2, 2006
(BTW, just so there's no misunderstanding, I'm not saying that devilsbrigade's answer is in any way wrong. It's actually what I would guess. I would just recommend professional advice.)
posted by robhuddles at 9:28 PM on February 2, 2006
Business Use of Car
Basically, you should be able to deduct on Schedule A your mileage expenses associated with work, and also depreciate the car pro-rated against business use. This is pretty ordinary (and you sound familiar with the concept).
The big problem for you is that the business use of the car does not prevent you from using it for another purpose. For instance, driving to a client site is something that you can't do at the same time as driving for personal use. But just letting your workplace experiment on the car isn't exactly an expense. It seems to me that you should be able to treat the car as purchased for business needs, but I agree you'd need to have an accountant look over this transaction. There are R&D loopholes and such that have tricky requirements, and I'm not even sure they would apply to personal use of a car.
posted by dhartung at 11:02 PM on February 2, 2006
Basically, you should be able to deduct on Schedule A your mileage expenses associated with work, and also depreciate the car pro-rated against business use. This is pretty ordinary (and you sound familiar with the concept).
The big problem for you is that the business use of the car does not prevent you from using it for another purpose. For instance, driving to a client site is something that you can't do at the same time as driving for personal use. But just letting your workplace experiment on the car isn't exactly an expense. It seems to me that you should be able to treat the car as purchased for business needs, but I agree you'd need to have an accountant look over this transaction. There are R&D loopholes and such that have tricky requirements, and I'm not even sure they would apply to personal use of a car.
posted by dhartung at 11:02 PM on February 2, 2006
This is the kind of thing that the IRS scrutinizes very carefully, because it is so easy to abuse. "Some internet dudes told me it was OK" is not proper documentation for an audit. Just watch out.
posted by smackfu at 6:27 AM on February 3, 2006
posted by smackfu at 6:27 AM on February 3, 2006
This thread is closed to new comments.
posted by devilsbrigade at 5:35 PM on February 2, 2006