Level 4

Question

Business use of personal auto

Forum|Forum|5 years ago
January 19, 2021
3 replies
27 views

Client has 70% business use auto. He got in an accident while on business. Can he deduct 100% (since it happened on business) of the accident repairs or only 70% (his year end usage)?

Lacerte Tax

This topic has been closed for replies.

BobKamman

Level 15

No insurance?

T

taxlady2008Author

Level 4

Yes he has insurance but didn't want to use it because it would increase his rates. The deductible would have been $1000 for a $1800 accident. He just paid it out right. It was a hit and run. .

Just-Lisa-Now-

Intuit Community Champion

You can't get a flat tire while driving for business and expect the replacement tire to only be used for business.

So its a repair like any other repair. whether it was due to driving business or personal miles, the vehicle is used for both.

♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪

sjrcpa

Level 15

By that same logic, if it happened on a personal trip you wouldn't use any of the expense to compute the business use of the auto.

The more I know the more I don’t know.

T

taxlady2008Author

Level 4

So are you saying that if you were in an auto accident while driving the auto for personal use, you couldn't apply the 70% business use percent at year end to the repair fees? If that is the case, you should be able to deduct it at 100%?

IRonMaN

Level 15

I think she is saying the deduction % changes to zero.

Slava Ukraini!

qbteachmt

Level 15

The personal vehicle still is a personal vehicle with mixed use; this is not a 100% business accident. This would be like trying to state: I use it 50% for business, so two tires are business and two are personal, when I buy them. Nope. It's all part of operation and maintenance.

Keep in mind you don't deduct costs to restore an asset as if they are Operating expense. That's the main flaw I see here in your logic. You also didn't state if this is being depreciated or using Mileage Allowance for tax reporting.

The Mileage Allowance rate covers the cost of operations including maintenance and repairs.

Actual Costs would make this is an improvement, to restore the vehicle as an asset to its prior status and utility. Of course, it also depends on that total $.

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