DEPRECIATION CAR FOR SCH C

[HOPE2]

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.  

[sjrcpa]

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>

[TaxGuyBill]

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]

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]

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

[BobKamman]

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.  

[HOPE2]

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

[HOPE2]

Thanks a lot. Business use 51%.

[HOPE2]

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. 

[HOPE2]

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

Also, he has two cars.

[PATAX]

@sjrcpa 👍👍👍 exactly right.

[PATAX]

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

[sjrcpa]

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

[IRonMaN]

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

[PATAX]

@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 · Accepted solution]

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!

[TaxGuyBill]

I love that joke too!

[IRonMaN]

An oldie but a goodie.

[HOPE2]

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.