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Author: |
Danny C Santucci, JD |
Course Length: |
Pages: 29 ||| Word Count: 18,858 ||| Review Questions: 10 ||| Final Exam Questions: 10 |
CPE Credits: |
2.0 |
IRS Credits: |
2 |
Price: |
$17.95 |
Passing Score: |
70% |
Course Type: |
Text - IRS Enrolled Agents |
Technical Designation: |
Technical |
Field Of Study: |
Taxes |
Approved Audience: |
NASBA QAS - NASBA Registry |
Key Takeaways: |
This mini course reviews the tax rules for deducting vehicle expenses used in the course of a taxpayers business.
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Frequently Asked Questions: |
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Description: |
Operating costs for vehicles used in the course of a taxpayer’s business are deductible. Thus, when taxpayers use their vehicles in their businesses or employment, they can deduct that portion of the cost of operating their vehicle. Such costs that can be deducted are property taxes that are paid on their vehicle if deductions are itemized on Schedule A. This mini-course reviews the apportionment of personal and business use, the actual cost method, the standard mileage method, and expensing. Moreover, this presentation informs practitioners about topics such as the benefits and costs of leasing versus owning, and working condition fringe benefits. |
Usage Rank: |
13333 |
Release: |
2016 |
Version: |
1.0 |
Prerequisites: |
General understanding of federal income taxation. |
Experience Level: |
Overview |
Additional Contents: |
Complete, no additional material needed. |
Additional Links: |
Internal: Travel, Entertainment, and Auto Rules from a Tax Perspective - v14 (Course Id 2387)
Internal: Basic Fringe Benefits - Mini Course
External: IRS Topic No. 510 - Business Use of Car
External: What Regulations Affect the Automotive Sector?
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Advance Preparation: |
None. |
Delivery Method: |
QAS Self Study |
Intended Participants: |
Anyone needing Continuing Professional Education (CPE). |
Revision Date: |
10-Jul-2026 |
NASBA Course Declaration: |
Participants must complete the final examination within one year of purchase and with a minimum passing grade of 70% or better to receive CPE credit unless otherwise noted on the Course History page (i.e. California Ethics must score 90% or better). After logging in click on the Course History links on your My Courses page for the Begin date and Expire date for the Final Exam. |
Keywords: |
Auto Rules from a Tax Perspective - Mini Course - CPE course for CPAs |
Learning Objectives: |
Learning Assignment & Objectives As a result of studying the assigned materials, you should be able to meet the objectives listed below. ASSIGNMENT At the start of the materials, participants should identify the following topics for study: * Apportionment of personal & business use * Deduction limitations using the actual cost method * Expensing - §179 * Predominate business use rule * Auto leasing * Standard mileage method * Auto trade-in vs. sale * Employer-provided automobile * Nonpersonal use vehicle * Reporting of an employer-provided automobile Learning Objectives After reading the materials, participants will be able to: 1. Recognize tax vehicle depreciation (§168) and expensing (§179) methods and their limitations under MACRS, recognizing basis, business use, and deduction computations. 2. Specify the predominate business use rule, recognizing the result of less than 50% qualified business use, cite the pros and cons of auto leasing, and determine how to estimate monthly lease payments, indicating what factors affect payments. 3. Identify items included under the standard mileage method, listing items that may be separately deducted, determine the taxable fringe benefit value of an employer-provided automobile using the general and special valuation methods and specify several qualified nonpersonal use vehicles, stating what reporting standards apply. |
Course Contents: |
Chapter 1 - Auto Rules Apportionment of Personal & Business Use Car Pool Fines Parking Fees Car Loan Interest Deduction Limit for Individuals Self-Employed and Business-Use Coordination Property Taxes SALT Limitation Sales Taxes Former Sales Tax Deduction for Qualified Vehicles (Expired) - §164 Actual Cost Method Deduction Limitations Definition of Car Depreciation & Expensing Basis Trade-In of Old Car for New Placed in Service Conversion to Business Use - “Lesser of” Rule MACRS - 5 (Actually 6) Years 200% Double Declining Balance Method 150% Declining Balance Method Election Straight-Line Method Election Half-Year Convention Mid-Quarter Convention Depreciation “Caps” - §280F(a) R.P. 2019-13 Safe Harbor No Separate Depreciation Caps for Trucks & Vans Post-Recovery Period Depreciation - Max Reduction Rule Partial Business Use Improvements Bonus (or Additional First-year) Depreciation - §168(k) Expensing - §179 Cost of Car Basis Reduction Making the §179 Election Business Use Reduction SUV Limitation Predominate Business (More Than 50%) Use Rule Qualified Business Use Exclusions Change From Personal to Business Use Employee Use of Their Own Car Failure to Meet Predominate Business Use Rule Later Reduction in Qualified Use ITC Recapture - Highly Unlikely Straight-line Depreciation Excess Depreciation Recapture Short Tax Year Depreciation Reduction Auto Leasing Pros & Cons Leasing Terminology Closed-End vs. Open-End Lease Formula for Monthly Payments Leasing Deduction Restrictions Income Inclusion Amount Separate Lease Inclusion Table for Trucks & Vans Cars Leased For 30 Days or More After 1986 Computation of Inclusion Nine-Month Following Year Rule Buying v. Leasing Standard Mileage Method Limitations on Standard Mileage Method Use, Ownership & Prior Depreciation Switching Methods Charitable Transportation Medical Transportation Auto Trade-In vs. Sale Working Condition Fringe Benefits Qualified Transportation - §132(f) Employer-Provided Automobile General Hypothetical Valuation Method Special Method #1 - Lease Value Annual Lease Value - For Entire Calendar Year Fair Market Value Safe Harbor Value Items Included in Annual Lease Value Table Prorated Annual Lease Value - For 30 Days or More Daily Lease Value - For Less Than 30 Days Optional Fleet-Average Valuation Rule (FAVR) Special Method #2 - Cents per Mile Regular Use - 50% Business Mileage Rule - 10,000 Miles Items Included In Cents-Per-Mile Rate Special Method #3 - Commuting Value Control Employee Employer-Provided Transportation in Unsafe Areas Qualified Employee Nonpersonal Use Vehicles - 100% Excludable Clearly Marked Police or Fire Vehicles Unmarked Law Enforcement Vehicles Law Enforcement Officer Trucks & Vans Pickup Truck Guidelines Van Guidelines Qualified Automobile Demonstration Use Full-time Automobile Salesperson Restrictions on Personal Use Reporting by Employer Election Not to Withhold for Income Taxes Value Reported Accounting Period Special Accounting Period - Pour Over Method Glossary |
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