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Vehicle Expenses (Ridesharing)
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Roger Fitzsimmons
Jan 16, 2018, 11:41:14 PM1/16/18
to
I was an Uber driver. I did it in 2015-16 but I basically started with a clean slate in 2017 because I retired the old vehicle on 1/1/17 and bought a new one on 1/10/17.
I stopped driving in July and sold the vehicle in October. I had 12,750 business miles and 450 personal miles. The cost basis of the car was about $12,750 and I got $7,000 when I sold it.
I chose to use the actual method. I thought my costs would equal the actual expenses for gas, repairs, insurance, etc., plus the $5,750 difference between the purchase and sale price of the car. Regardless of the depreciation among, the depreciation plus loss on sale should equal $5,750.
However, when I put this into the program I'm using, FreeTaxUSA, it tells me my depreciation deduction is 0.
What am I, or the program, doing or thinking wrong? Is the loss on the sale of the car supposed to go in a different place? I consider the 450 personal miles to be de minimus, which I think is reasonable - I did have a personal car that I almost always used for personal travel.
--
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I stopped driving in July and sold the vehicle in October. I had 12,750 business miles and 450 personal miles. The cost basis of the car was about $12,750 and I got $7,000 when I sold it.
I chose to use the actual method. I thought my costs would equal the actual expenses for gas, repairs, insurance, etc., plus the $5,750 difference between the purchase and sale price of the car. Regardless of the depreciation among, the depreciation plus loss on sale should equal $5,750.
However, when I put this into the program I'm using, FreeTaxUSA, it tells me my depreciation deduction is 0.
What am I, or the program, doing or thinking wrong? Is the loss on the sale of the car supposed to go in a different place? I consider the 450 personal miles to be de minimus, which I think is reasonable - I did have a personal car that I almost always used for personal travel.
--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2011) - All rights reserved. >>
<< ------------------------------------------------------- >>
Arthur Rubin
Jan 17, 2018, 8:01:57 AM1/17/18
to
On Tuesday, January 16, 2018 at 8:41:14 PM UTC-8, Roger Fitzsimmons wrote:
> I was an Uber driver. I did it in 2015-16 but I basically started with a clean slate in 2017 because I retired the old vehicle on 1/1/17 and bought a new one on 1/10/17.
>
> I stopped driving in July and sold the vehicle in October. I had 12,750 business miles and 450 personal miles. The cost basis of the car was about $12,750 and I got $7,000 when I sold it.
>
> I chose to use the actual method. I thought my costs would equal the actual expenses for gas, repairs, insurance, etc., plus the $5,750 difference between the purchase and sale price of the car. Regardless of the depreciation among, the depreciation plus loss on sale should equal $5,750.
>
> However, when I put this into the program I'm using, FreeTaxUSA, it tells me my depreciation deduction is 0.
>
> What am I, or the program, doing or thinking wrong? Is the loss on the sale of the car supposed to go in a different place? I consider the 450 personal miles to be de minimus, which I think is reasonable - I did have a personal car that I almost always used for personal travel.
There is no depreciation on property, other than real property, put in service snd disposed of in the same year. However, the apportioned loss should be an ordinary loss, reported on part II of gor 4797.
> I was an Uber driver. I did it in 2015-16 but I basically started with a clean slate in 2017 because I retired the old vehicle on 1/1/17 and bought a new one on 1/10/17.
>
> I stopped driving in July and sold the vehicle in October. I had 12,750 business miles and 450 personal miles. The cost basis of the car was about $12,750 and I got $7,000 when I sold it.
>
> I chose to use the actual method. I thought my costs would equal the actual expenses for gas, repairs, insurance, etc., plus the $5,750 difference between the purchase and sale price of the car. Regardless of the depreciation among, the depreciation plus loss on sale should equal $5,750.
>
> However, when I put this into the program I'm using, FreeTaxUSA, it tells me my depreciation deduction is 0.
>
> What am I, or the program, doing or thinking wrong? Is the loss on the sale of the car supposed to go in a different place? I consider the 450 personal miles to be de minimus, which I think is reasonable - I did have a personal car that I almost always used for personal travel.
I don't think the IRS recognizes "de minimus" personal use on business assets, but your business use should be 12750/13200 = 96.59%, which is the same percentage you should use for the actual expenses.
--
Arthur Rubin, AFSP, CRTP, Brea, CA
Roger Fitzsimmons
Jan 17, 2018, 11:47:11 AM1/17/18
to
On Wednesday, January 17, 2018 at 8:01:57 AM UTC-5, Arthur Rubin wrote:
> On Tuesday, January 16, 2018 at 8:41:14 PM UTC-8, Roger Fitzsimmons wrote:
> > I was an Uber driver. I did it in 2015-16 but I basically started with a clean slate in 2017 because I retired the old vehicle on 1/1/17 and bought a new one on 1/10/17.
> >
> > I stopped driving in July and sold the vehicle in October. I had 12,750 business miles and 450 personal miles. The cost basis of the car was about $12,750 and I got $7,000 when I sold it.
> >
> > I chose to use the actual method. I thought my costs would equal the actual expenses for gas, repairs, insurance, etc., plus the $5,750 difference between the purchase and sale price of the car. Regardless of the depreciation among, the depreciation plus loss on sale should equal $5,750.
> >
> > However, when I put this into the program I'm using, FreeTaxUSA, it tells me my depreciation deduction is 0.
> >
> > What am I, or the program, doing or thinking wrong? Is the loss on the sale of the car supposed to go in a different place? I consider the 450 personal miles to be de minimus, which I think is reasonable - I did have a personal car that I almost always used for personal travel.
>
>
> There is no depreciation on property, other than real property, put in service snd disposed of in the same year. However, the apportioned loss should be an ordinary loss, reported on part II of gor 4797.
>
> I don't think the IRS recognizes "de minimus" personal use on business assets, but your business use should be 12750/13200 = 96.59%, which is the same percentage you should use for the actual expenses.
>
> --
> Arthur Rubin, AFSP, CRTP, Brea, CA
So if I lost almost $6000 on the sale of the car, that $6000 still shows as a profit for Schedule C purposes and I still have to pay self-employment tax on it?
> On Tuesday, January 16, 2018 at 8:41:14 PM UTC-8, Roger Fitzsimmons wrote:
> > I was an Uber driver. I did it in 2015-16 but I basically started with a clean slate in 2017 because I retired the old vehicle on 1/1/17 and bought a new one on 1/10/17.
> >
> > I stopped driving in July and sold the vehicle in October. I had 12,750 business miles and 450 personal miles. The cost basis of the car was about $12,750 and I got $7,000 when I sold it.
> >
> > I chose to use the actual method. I thought my costs would equal the actual expenses for gas, repairs, insurance, etc., plus the $5,750 difference between the purchase and sale price of the car. Regardless of the depreciation among, the depreciation plus loss on sale should equal $5,750.
> >
> > However, when I put this into the program I'm using, FreeTaxUSA, it tells me my depreciation deduction is 0.
> >
> > What am I, or the program, doing or thinking wrong? Is the loss on the sale of the car supposed to go in a different place? I consider the 450 personal miles to be de minimus, which I think is reasonable - I did have a personal car that I almost always used for personal travel.
>
>
> There is no depreciation on property, other than real property, put in service snd disposed of in the same year. However, the apportioned loss should be an ordinary loss, reported on part II of gor 4797.
>
> I don't think the IRS recognizes "de minimus" personal use on business assets, but your business use should be 12750/13200 = 96.59%, which is the same percentage you should use for the actual expenses.
>
> --
> Arthur Rubin, AFSP, CRTP, Brea, CA
Let's say I receive a legal settlement in 2018 pertaining to my having stopped driving. Where would I report that (in 2018)?
MTW
Jan 17, 2018, 12:42:15 PM1/17/18
to
On Wednesday, January 17, 2018 at 8:47:11 AM UTC-8, Roger Fitzsimmons wrote:
> So if I lost almost $6000 on the sale of the car, that $6000 still shows as
> a profit for Schedule C purposes and I still have to pay self-employment tax
> on it?
Yes, the loss on the sale of the car does NOT reduce your self-employment income. Under the circumstances, would you end up better off if you used the standard mileage allowance rather than the actual expense method???
> So if I lost almost $6000 on the sale of the car, that $6000 still shows as
> a profit for Schedule C purposes and I still have to pay self-employment tax
> on it?
> Let's say I receive a legal settlement in 2018 pertaining to my having
> stopped driving. Where would I report that (in 2018)?
Roger Fitzsimmons
Jan 18, 2018, 9:25:53 AM1/18/18
to
On Wednesday, January 17, 2018 at 12:42:15 PM UTC-5, MTW wrote:
> On Wednesday, January 17, 2018 at 8:47:11 AM UTC-8, Roger Fitzsimmons wrote:
> > So if I lost almost $6000 on the sale of the car, that $6000 still shows as
> > a profit for Schedule C purposes and I still have to pay self-employment tax
> > on it?
>
> Yes, the loss on the sale of the car does NOT reduce your self-employment income. Under the circumstances, would you end up better off if you used the standard mileage allowance rather than the actual expense method???
>
> > Let's say I receive a legal settlement in 2018 pertaining to my having
> > stopped driving. Where would I report that (in 2018)?
>
> We would need to know more about the "origin of the claim" to say for sure, but chances are you would report it on line 21 of the 1040.
If I use the standard mileage method, can I still deduct the loss on the sale of the car?
> On Wednesday, January 17, 2018 at 8:47:11 AM UTC-8, Roger Fitzsimmons wrote:
> > So if I lost almost $6000 on the sale of the car, that $6000 still shows as
> > a profit for Schedule C purposes and I still have to pay self-employment tax
> > on it?
>
> Yes, the loss on the sale of the car does NOT reduce your self-employment income. Under the circumstances, would you end up better off if you used the standard mileage allowance rather than the actual expense method???
>
> > Let's say I receive a legal settlement in 2018 pertaining to my having
> > stopped driving. Where would I report that (in 2018)?
>
> We would need to know more about the "origin of the claim" to say for sure, but chances are you would report it on line 21 of the 1040.
It would seem like the standard mileage method would imply some depreciation of the car, which would reduce the loss on disposition.
The standard mileage method resulted in a deduction of about $6900, while the actual expenses were about $4100.
Alan
Jan 18, 2018, 8:21:34 PM1/18/18
to
On 1/18/18 6:22 AM, Roger Fitzsimmons wrote:
> On Wednesday, January 17, 2018 at 12:42:15 PM UTC-5, MTW wrote:
>> On Wednesday, January 17, 2018 at 8:47:11 AM UTC-8, Roger Fitzsimmons wrote:
>>> So if I lost almost $6000 on the sale of the car, that $6000 still shows as
>>> a profit for Schedule C purposes and I still have to pay self-employment tax
>>> on it?
>>
>> Yes, the loss on the sale of the car does NOT reduce your self-employment income. Under the circumstances, would you end up better off if you used the standard mileage allowance rather than the actual expense method???
>>
>>> Let's say I receive a legal settlement in 2018 pertaining to my having
>>> stopped driving. Where would I report that (in 2018)?
>>
>> We would need to know more about the "origin of the claim" to say for sure, but chances are you would report it on line 21 of the 1040.
>
> If I use the standard mileage method, can I still deduct the loss on the sale of the car?
>
> It would seem like the standard mileage method would imply some depreciation of the car, which would reduce the loss on disposition.
>
> The standard mileage method resulted in a deduction of about $6900, while the actual expenses were about $4100.
>
There is a rule that says if you dispose of a business vehicle where you
> On Wednesday, January 17, 2018 at 12:42:15 PM UTC-5, MTW wrote:
>> On Wednesday, January 17, 2018 at 8:47:11 AM UTC-8, Roger Fitzsimmons wrote:
>>> So if I lost almost $6000 on the sale of the car, that $6000 still shows as
>>> a profit for Schedule C purposes and I still have to pay self-employment tax
>>> on it?
>>
>> Yes, the loss on the sale of the car does NOT reduce your self-employment income. Under the circumstances, would you end up better off if you used the standard mileage allowance rather than the actual expense method???
>>
>>> Let's say I receive a legal settlement in 2018 pertaining to my having
>>> stopped driving. Where would I report that (in 2018)?
>>
>> We would need to know more about the "origin of the claim" to say for sure, but chances are you would report it on line 21 of the 1040.
>
> If I use the standard mileage method, can I still deduct the loss on the sale of the car?
>
> It would seem like the standard mileage method would imply some depreciation of the car, which would reduce the loss on disposition.
>
> The standard mileage method resulted in a deduction of about $6900, while the actual expenses were about $4100.
>
have used the standard mileage rate, then you must adjust your basis for
the amount of depreciation taken. The IRS publishes that depreciation
rate each year. For 2017, the amount of depreciation embedded in the std
rate is 25 cents/mile. 12750 miles x .535 = $6821 business deduction.
12750 x .25 = $3188 adjustment to basis before calculationg your
ordinary loss.
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