neallove

[neallove]

Can taxpayer who used the mileage method in 2006 go back and amend return to use actual expenses and depreciation?

[joanmcq]

Whichever is higher. As long as no accelerated depreciation method was used in the first year, you can switch back and forth depending on which gives you the best results. If actual was taken in the 1st year, you always have to use actual. Although I think if you use SL depreciation in the 1st year, you can switch to standard mileage the next.

[KJ Judd]

I thought it was the opposite. If you used standard mileage rate in the first year, you had to use standard mileage on that car going forward. But you can always switch back to actual. (Of course, you need to compute how much depreciation you took as part of the standard mileage rate.)

[Kram BergGold]

Amend

I see no reason why you can't amend the 2006 return to change the method.

[joanmcq]

No, the rule is in place to keep someone that accelerated depreciation in the 1st year to then get an artificially high deduction in subsequent years by using standard mileage, since part of the mileage rate is to account for depreciation.

To change depreciation, you have to follow the rules for change of accounting method.