Client has used the mileage rate for deducting auto
expenses on his leased car lease for the term of the lease (3 years). He now has bought the car when the lease was
up. He also now wants to u...
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Client has used the mileage rate for deducting auto
expenses on his leased car lease for the term of the lease (3 years). He now has bought the car when the lease was
up. He also now wants to use the actual
method. My questions are: 1).
Does the fact that the car purchased, was the same car that he was
leasing, prevent him from taking the special depreciation allowance? I'm reading "the special depreciation
allowance applies only for the first year the car was placed in
service". 2). Is he required to use the straight line
depreciation method because he "used the standard mileage rate in the
first year of business" - even though he was leasing the car. 3). What
would be considered the "estimated remaining useful life"? Is that based on the 6 years for an auto, so
he would use 3 years on the SL basis?
4). Would there be a reduction to
the depreciable basis if he was leasing for 3 years and then purchased the car. The purchase price was to buy his leased car
$20,000 and he took large deductions using the mileage rate in the last 3 years