Standard Mileage Partial Bus Use Car Trade In

[Sandy26]

Hi Everyone,

I've been reading all of the IRS publications and discussion forums relating to this topic. My head is swimming. The more I read, the more confused I am getting! Please HELP!!!

My client purchased a Toyota Camry in 1993. In 2001, she started doing business as a sole proprietor and used a very small % of total miles as business miles. She used the Standard Mileage deduction each year and then on 1/21/07, she traded in the "old Camry" for a "new Camry". I never worried about the FMV or adjusted basis rule because she always used the Standard Mileage deduction. Below are the Bus Miles, Total Miles & %

2001- 233 Bus Miles- 8911 Total Miles- 2.61%

2002- 641 Bus Miles- 12,798 Total Miles- 5.01%

2003- 759 Bus Miles- 12,581 Total Miles- 6.03%

2004- 1134 Bus Miles- 12,328 Total Miles- 9.20%

2005- 2619 Bus Miles- 10,941 Total Miles- 23.94%

2006- 497 Bus Miles- 9956 Total Miles- 4.99%


I still haven't gotten an answer regarding if she used the "old Toyota" in January of 2007.

Is Example #2 on page 10-9 to 10-10 in TTB the example I should use? If yes, when line 1 asks for Original Cost Basis of the old car, do I need to use the original purchase price of the Camry from 1993?

If there is an easier way for me to deal with disposing of the old Camry and purchasing the new Camry, please let me know. This seems like so much work and confusion for so little business usage!


Thanks for your help,
Sandy

[veritas]

Sandy

I think you will find the worksheet on page 10-2 of TTB very helpful.

The software I use will actually handle this type of exchange.