Message Font: Serif | Sans-Serif
No. of Recommendations: 0
[[ I am trying to determine my tax basis in a car I put into service in my Schedule C
business shortly after it was purchased. According to my reading of the IRS
publications and the TurboTax help, it seems like I should use the FMV of the
car at the time it was placed into service as my tax basis.]]

That's true. You can't use your original purchase price of the vehicle, but the FMV instead (assuming that the FMV is less than the original purchase price).

[[ Unfortunately, I have
no idea what the FMV was or is, since the blue book doesn't list it because it's
too new.

I purchased the car for ~15k on 6/24/98 and used it for exclusively personal
purposes until 10/19/98 when it was converted to combined business/personal
use. If I cannot find a blue book value, is there a depreciation schedule I could
use to compute its FMV? ]]

Simply speak with the dealer. They should be able to help you. Since the time period between your purchase and the inclusion in your business is so short, I'd guess that the FMV of the vehicle is close to your purchase price. But we both know that new cars take a depreciation "hit" when you dive them off the lot. So your dealer should be able to help you.

And if you can't get any help from the dealer, just be reasonable with your basis computations and you'll likely not have any problems. Or you could take the easy way out and use the "cents per mile" method rather than the "actual" method.

TMF Taxes
Print the post  


In accordance with IRS Circular 230, you cannot use the contents of any post on The Motley Fool's message boards to avoid tax-related penalties under the Internal Revenue Code or applicable state or local tax law provisions.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.