On July 1, 2019, Victor purchased a car for $18,000. Victor used the automobile exclusively in his
Question:
On July 1, 2019, Victor purchased a car for $18,000. Victor used the automobile exclusively in his business. Victor travels from his home office to client's businesses to conduct work. He maintains a calendar including the client's address, date of meeting, and reason for the appointment. The vehicle is 5-year recover property under Internal Revenue Code section 168. In 2020, because of the COVID-19 pandemic, Victor conducts most of his business remotely from his home office. As a result, Victor reduces his business use of the car significantly so it is now 30% business use and 70 % personal use. Since he was home more, Victor decided to adopt a dog. Victor now uses the car to drive his dog to walking paths several times a week. (Jurisdiction: U.S.
(a) What deduction if any can Victor claim on his 2019 tax return for the car?
(b) What deduction if any can Victor claim on his 2020 tax return for the car?
(c) How would your answer to (a) change if Victor was an employee of a company and did not operate his own business?
Taxation For Decision Makers 2014
ISBN: 9781118654545
6th Edition
Authors: Shirley Dennis Escoffier, Karen Fortin