taxes

[Don McCallion]

On 4/9, James Grebe wrote in part:

>	Have any of you who have a vehicle that is soley (100%), therefore fully
>deductable seen the question on this years tax return.  It is on the back
>page of form 4562 Depreciation and Amortization.  Part V line 32 and
>states,
>	 "Was the vehicle available for personal use during off-duty hours?  May I
>ask what is the difference.  What does that have to do with anything.
>line 35 already asks if there is another vehicle you use for personal use.
>
>Is the IRS getting ready to pull something on us.

Actually these same questions have been on Form 4562 (and Schedule C for
those who don't have to file Form 4562) for some years now.

There is obviously less likelihood of padding vehicle expense deductions
when a vehicle is not available for personal use during off-duty
hours...such as when parked at a business location or a garage some
distance from your home.  The IRS would expect to see this answered yes
when a 100% deductibility is claimed.

If there is another vehicle available for personal use (your wife's
bomb), then it is likely that your business vehicle, even if parked at
your home, is used strictly for business purposes.  Hence, your claimed
percentage of business use, whether 100% or less, is more likely to
withstand or avoid audit.

There are those free-wheeling entrepreneurs who claim 100% business
deductions for vehicles, then answer both questions no, or answer Line 32
yes and Line 34 (not Line 35) no.  Guess what happens.

Don McCallion - don@ct2.nai.net
New Milford, CT