Can i claim a loss on a vehicle that was primarily used to travel to and from work.?

Question

I bought the truck new in aug 05. Traded it in around sept of 06 because my gas bill was reaching $500 a month. Bought a honda cr-v which gets much better milage. DIdn't want to give up my truck but felt like I couldn't afford to keep paying for gas. I traded the Truck in for 11,000 less than it originally cost a year ago. I feel like high gas prices put me in a position where I couldn't afford to keep the vehicle and had to take a big loss on it. I use this vehicle as a primary means to get to work is that or could that be a business loss or some other loss.

Answer 1

No, you can't. Mileage for traveling to and from work is considered commuting miles, not business miles. Loss on the sale (a trade-in is considered a sale) of a personal asset is nondeductible. If you are trying to substantiate the auto as a business asset, you will need to consider the business use miles versus the total miles driven in the vehicle during the year. Note that I mentioned in the beginning that miles for commuting to and from work is NOT considered business miles. The percentage of business miles then defines the business use percentage of the vehicle. Then you need to determine the depreciation of the vehicle (even if you did not claim depreciation, the IRS will reduce the tax basis of the vehicle as if you did) to determine your basis in the vehicle. The sales price of the vehicle less your basis in the vehicle is your gain/loss on the vehicle. You then apply the business use percentage to determine your business-related gain/loss. Since you had a loss, the business-related loss is reduced by the amount of depreciation allowed/allowable. Once you figure out what your net business-related loss is, the loss can potentially be deductible as an employee business expense. Note however, that employee business expenses are deductible as a miscellaneous itemized deduction, which is further reduced by 2% of your adjusted gross income.

Answer 2

No. You would have done better writing off the gas expense. A loss is incurred any time that you could no longer use the truck as a result of theft, irreparable damage, or irreparable mechanical breakdown. Choosing to sell it and taking an $11,000 hit does not constitute a loss.

I was faced with a similar dilemma, however I figured that the total cost of getting another car would greatly offset the higher gas prices over the course of the next 5 years. Paying nearly $82 to fill up the tank on my SUV was painful, however, thats only double what I used to pay. So I considered $41 a week over the course of 5 years, that was about $3500 in extra gas for the privilage of driving a car that I like vs. spending an extra $10,000 to drive a car that is more fuel efficient.

Answer 3

jointly as Mr. Quinn is authentic, this in all possibility won't shrink your taxes any. a million. Your loss is measured by using the shrink interior the cost of the vehicle from the day previously the twist of fate to the day afterwards. (the way you financed it particularly is a non-subject.) 2. then you certainly subtract any coverage. 3. then you certainly subtract $a hundred. 4. then you certainly subtract 10% of your AGI. 5. then you certainly upload what's left to the time table A and in case you could itemize.... Step 4 knocks maximum persons out. (while you're making $50,000, you subtract $5000.) Step 5 knocks out greater human beings (70% of human beings do no longer itemize.)

Answer 4

Sorry, this is a personal loss and not deductable at all.

Commuting back and forth to work is not considered business use.

Answer 5

I'm not a CPA, but I don't think so. A bad investment decision isn't deductible.

Answer 6

No, you can't deduct it. Commuting expenses are never deductible.