Sales Tax on Car

[Bird Legs]

Client has a business operated out of home. Purchased a new car in August, 2005 used about 40% of time for business. Total cost of car including sales tax is 23,276.
The sales tax is $1,356.
How would you allocate the sales tax between Sched. A, itemized deductions, and cost of car for business purposes?
Thanks again.

[jainen]

Reduce basis

Reduce basis by the amount of any deduction taken on Schedule A. It might be best to claim 100% there.

[sea-tax]

Client has a business operated out of home. Purchased a new car in August, 2005 used about 40% of time for business. Total cost of car including sales tax is 23,276.
The sales tax is $1,356.
How would you allocate the sales tax between Sched. A, itemized deductions, and cost of car for business purposes?
Thanks again.

how about 40% to capital asset ($542.4) and 60% to sch a ($813.6) . This is assuming you want to capitalize the vehicle rather than mileage. Just my 2 cents

[Bird Legs]

Jainen-Sea Tax

Thanks for your response. Very much appreciated.