Vehicle Depreciation

[terry]

New vehicle bought in 2010. Used over 50% for sch C business. Used less than 50% for Sch E rental. Atx is calculating MACRS & bonus for Sch.C & S/L for Sch E. My Question is how to enter this into program correctly since the vehicle is used roughly 90% business total. Thanks.

[Pacun]

Very good question and I wish I had an answer.

The way you are doing... it is correctly calculated by ATX since sch E uses the car less than 50% business. You don't have a problem on schedule C because you use it more than 50% for that activity.

This sounds crazy but this might be the only way ATX will be able to handle it.

Let's say your car cost $25,000 and you use it 50% for sch C and 40% for sch E. Let's say we run this car 25,000 miles in the year(10K miles for rental, 12,500 miles for sch C and 2,500 for personal)

Just in case we have limitations, I would enter total cost of the car on asset input. I will also enter the total miles (90% business) and the section 179 and special allowance amounts. I would print this figures and have it for my records. (I would delete this asset or modify it and use it as the one for sch C below)

In your case, I will input 2 cars: One costing $15K and the other costing $10K.

The one costing $15K will be for your schedule C and personal and I will enter total miles 15K and this will be 90% business.

The other car (costing $10K) will be 100% business for schedule E and I will enter 10K miles. (Remember that depreciation will be added to the real estate depreciation).

I will have to divide all expenses (60% and 40%).

[Kimberly K]

New vehicle bought in 2010. Used over 50% for sch C business. Used less than 50% for Sch E rental. Atx is calculating MACRS & bonus for Sch.C & S/L for Sch E. My Question is how to enter this into program correctly since the vehicle is used roughly 90% business total. Thanks.

Terry,

It sounds as if you are okay on the Schedule C, but it sounds like you have listed property for the Schedule E. If used less than 50% the straight line method is used and Macrs and bonus or 179 cannot be used. ATX is calculating it correctly. These are two separate tax activities(the Sch C and Sch E), eventhough it is the same taxpayer and the same vehicle, the % use is what it is.