Truck

[bekzm]

Clients has been taking mileage on his 04 each year. Has the same truck but also purchased 08 truck to haul his loader. Question - he wants to continue taking mileage on his 04 but I set up the new 08 on depreciation along with his loader. Now the gas tickets have not clue which truck they go to. Would it be save to take a % of the mileage for the 04 for fuel and back out the same % from the fuel to be safe. Any suggestion

[DaveinTexas]

Truth be told

Clients has been taking mileage on his 04 each year. Has the same truck but also purchased 08 truck to haul his loader. Question - he wants to continue taking mileage on his 04 but I set up the new 08 on depreciation along with his loader. Now the gas tickets have not clue which truck they go to. Would it be save to take a % of the mileage for the 04 for fuel and back out the same % from the fuel to be safe. Any suggestion

I do this the same way; just be conservative. I ask the avg gas mileage for the truck, divide that by the total miles driven, multiply that by the avg price of fuel, deduct some for personal use, etc, etc.

Going forward, and I'm sure you have already done this, instruct the client to keep separate records for each truck. I would even instruct him to keep oil change and other repair records for BOTH trucks. These will act as a 3rd party verification of the total miles driven throughout the year; most repair records indicate the odometer reading.

[buzzardbreath]

Mixing Methods

If he has been taking mileage on his '04, it is likely the standard mileage method will give him a greater deduction for that particular truck. And cannot mix the methods. They both get the standard mileage, if not they both will need actual method.

Either way, a mileage log must be maintained. In my opinion it raises suspicion that someone meticulous enough to maintain a mileage log somehow cannot maintain separate records for expenses. Even the insurance bill can be split.

If expenses are allocated, it also destroys the analysis of which method is more advantageous.

[bekzm]

Thanks

Thanks for the input which why is it we preach and preach about keeping stuff separate and when the time comes - yup I did - so where is it???? It seems I am the only one that has this problem till read other stuff.....why ask why.

[Nashville]

It's Not Just You

Bezel, it's not just you. I think all of us encounter inconsistent thinking from our clients, and trucks are one of the worst topics. Seems like every good 'ole boy wants the gubbermint to help pay for their honkin' big truck.

[DaveinTexas]

Ceiling

I attended a seminar once and one of the attendees said they taped random numbers on their ceiling. The presenter asked him, "Why?" He said the numbers are there for the clients that look up at the ceiling when you ask them how many miles they drove last year. That way, it takes the pressure off the client to come up with an accurate number!

I think I may try that!

[TaxGuyBill]

I attended a seminar once and one of the attendees said they taped random numbers on their ceiling. The presenter asked him, "Why?" He said the numbers are there for the clients that look up at the ceiling when you ask them how many miles they drove last year. That way, it takes the pressure off the client to come up with an accurate number!

I think I may try that!

Like this ...

https://d2iua9xsrei43a.cloudfront.net/uploads/assets/3022/original.jpg?1383583152

[DaveinTexas]

Ha!

Like this ...

https://d2iua9xsrei43a.cloudfront.ne...jpg?1383583152

Was that you in the seminar??? Hilarious

[Zee]

If he has been taking mileage on his '04, it is likely the standard mileage method will give him a greater deduction for that particular truck. And cannot mix the methods. They both get the standard mileage, if not they both will need actual method.

Either way, a mileage log must be maintained. In my opinion it raises suspicion that someone meticulous enough to maintain a mileage log somehow cannot maintain separate records for expenses. Even the insurance bill can be split.

If expenses are allocated, it also destroys the analysis of which method is more advantageous.

I must be missing something? If the taxpayer has two vehicles, are you saying he can't use the standard mileage rate for one of the vehicles and actual expenses for the other? Here's what the taxbook says:

Who cannot use the standard mileage rate method? The standard
mileage rate cannot be used if the taxpayer:

• Uses five or more cars at the same time for business, such as in
fleet operations.
• Claimed a depreciation deduction for the car using any method
other than straight-line depreciation for its estimated useful life.
• Claimed a Section 179 deduction on the car.
• Claimed the special depreciation allowance on the car.
• Claimed actual expenses for a car that is leased.
• Is a rural mail carrier who received a qualified reimbursement

This would appear to indicate that the TP can use a different method for two vehicles as long as one of the other exceptions isn't listed.

[Roland Slugg]

Of course he can continue to use the SMR for his '04 truck! As for the '08 truck, he can deduct either the SMR or actual expenses, but if he deducts actual in the first year he owns it, he will have to use actual every year for that vehicle.

As others have also mentioned, I would recommend to the client that he start keeping good records regarding which vehicle gas and other expenses are paid for, and also start keeping a mileage log in each vehicle that will capture each year's total mileage, broken down between business, commuting (if any), and other personal miles.