Taxpayer buys a fancy new SUV for $50k in 2013 "100% business". During 2013 they use it to move stuff around and get supplies to their new store. The business isn't open yet though, it opens in 2014. If taking actual expenses, does depreciation start on the date the business opens in 2014? Or date they started using vehicle in 2013 - but because business wasn't open, so 2013 depreciation/expenses amortized over 15 years? Or? Other vehicle expenses? What if SMR?
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Last edited by David1980; 01-24-2014, 01:32 AM. -
What I would do
Compute car expense as you normally would and then add it to the other start up costs to either be deducted all at once if under $5,000 or amortized over 15 years. You might also be able to deduct the first $5,000 and then amortize the rest. You should research that option. -
SMR is the standard mileage rate.Comment
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I know that, more wondering what happens if depreciation and expenses or SMR is taken. Say we have $11,160 depreciation including special for 2013 (assuming it can be considered "placed in service" in 2013?) and $5,000 other vehicle expenses - would you amortize those over 15 years, or would you treat the vehicle as placed in service in 2014 when the business opens and use 2014 as 1st year for depreciation? If we did standard mileage rate instead, and had 5,000 miles the standard mileage rate on those 5000 2013 miles amortized after business opens in 2014?
Deducting $5,000 and amortizing the rest is definitely a good thought too. Will have to look into it.Comment
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