Vehicle Loss and Salvage

[S T]

I have a taxpayer that in 2015, his 92 Mercedes was totaled in an accident and the other party's insurance company, paid $ 2,459. Taxpayer kept the vehicle by recording a salvage title, then paid a body shop $ 5,111 to repair the vehicle.

Vehicle is business use of approx 50% using actual expenses and the vehicle is fully depreciated

How to report on the 2015 Tax Return?

Thanks

Sandy

[Snaggletooth]

Reduce Repair

Sandy, this may be so simple that I'm missing something but I'll go ahead and open my big mouth:

You are stuck with "actual" expenses because you've taken all the depreciation in prior years. I believe you continue with no other effect except to add $2652 to his repair expense. (Difference between $5111 and $2459) Ignore trying to report a casualty.

I am directing this to the reporting of the accident only, and not commenting on the listed property effect as you have not told us definitively whether the use falls below 50% or not.

[Roland Slugg]

That's right. The repair cost was $2,652, net, and will be treated just like any other cost to own and operate the vehicle. At the EOY the deductible portion will be whatever the year's business use percentage turns out to be.

[S T]

Thanks Snags and Roland