S M R for personal auto converted to biz use

[Black Bart]

I want to use standard mileage rate because (of course) it's so much better than actual expenses, but client used the car as his personal auto for three years before business-driving it in '08. It's never been depreciated or business-connected, but the books say "...if you want to use (SMR), you must choose to use it in the first year the car is AVAILABLE for use in your business."

So...since he had the car all along and could have used it for business anytime he wanted in the past (even though he did not), I'm thinking he's stuck with actual. Is this right?

P.S. Are converted personal cars limited to SL depreciation if SMR is not used?

[Gretel]

I want to use standard mileage rate because (of course) it's so much better than actual expenses, but client used the car as his personal auto for three years before business-driving it in '08. It's never been depreciated or business-connected, but the books say "...if you want to use (SMR), you must choose to use it in the first year the car is AVAILABLE for use in your business."

Available should equal "placed in service". I don't think it matters when you buy property only when it is available for your biz which means you actually use it in your biz.

[erchess]

B B

I have not seen your "available" quote and on the other hand I don't have a cite for my opinion but I have always felt free to use SMR if it was used the first year the vehicle was actually used in the current business or if I was working on the return for the first year the vehicle was actually used in the current business.

In your client's case the current year is the first he has actually used the car in business and he should probably use SMR to preserve the option of doing so in future years even if for some reason Actual yields a higher deduction this year. To take another example, let's say that John started using his van some time in the past in his business as a plumber. He took actual expenses for some reason. Now in the year I am working on he stopped being a plumber and became something else and this is his first year using the same van in his new occupation. He is in my opinion free to choose SMR and like your client probably should do so even if actual happens to yield a bigger deduction this year.