I have a small wholesale business..very small and i'm also a Realtor. I recently bought an Suburban. How do I show business use so that I don't get audited. I eventually will want to do a section 179 write off. I understand that I have to show business use. How do I do this?
2007-01-25 13:58:11 · 3 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
One way to measure the percentage of business use is to log the business mileage and the total mileage and take the ratio of business mileage to total mileage for the period of time you owned the vehicle in 2006. That percent is multiplied by the cost of the vehicle, and the result is your basis for depreciation.
Keep a good mileage log of all business trips, separated into your realty business and wholesale business. You may have vehicle depreciation in both of those businesses.
2007-01-25 15:56:00 · answer #1 · answered by ninasgramma 7 · 0⤊ 0⤋
Section 179 is only available for the first year the vehicle was in service, it would be pro-rated for time of ownership and business use. You need to have records indicating how many miles you drove for your business, as a realtor, and the total, don't be a pig - you will get audited if you try to write off the whole thing.
2007-02-01 11:06:27 · answer #2 · answered by Scott K 7 · 0⤊ 0⤋
The way you can show a business use is to keep records of the miles that you drive your suv for the business and separate miles for the non business use. When you do your taxes you will take the total miles driven during the year and divide them by the business use. This will give you a percentage of business use. ( hint: the IRS doesn't like 100% business use on personal property unless you really have all the mileages and all the data and have no personal use at all, that means you can't stop for milk on the way home from work) when you do think the form 2106 or 2160 for business expenses you can do all the mileage
2007-01-30 14:51:50 · answer #3 · answered by maria169 2 · 0⤊ 0⤋