Conflicting IRS publications: listed Property

[tim868868]

I came across this conflict in IRS publications regarding the listed property.  I started driving for Uber with my car last year and I want to claim depreciation. According to form 4562 instructions page 2: " Listed property does not include: 1. ... 2. ... 3. An ambulance, hearse, or vehicle used for transporting persons or property for compensation or hire; " So, my car should not be treated as a listed property. However, on Pub 946, page 52, 'Other Property Used for Transportation
Although vehicles used to transport persons or property for pay or hire and vehicles rated at more than the 6,000-pound threshold are not passenger  automobiles, they are still “other property used for transportation” and are subject to the special rules for listed property'.

So, eventually, is the car a listed property or not?

ps. the car was used by myself before, so I guess I cannot claim section 179.

[GeorgeM777]

Yes, an automobile is listed property.  Being listed property does not mean you cannot depreciate it or cannot deduct expenses associated with your Uber work.  Listed property is property that can be used for business and personal use.  And yes, there are are special recordkeeping requirements and restrictions on depreciation and expensing with regard to listed property.  Additionally, computers, computer peripherals, photographic equipment, audio, and video equipment, and other types of property that are often used for both personal and business purposes are also types of listed property. 

The IRS' Topic No. 510 Business Use of Car provides the following information about vehicles:

• To use the standard mileage rate for a car you own, you must choose to use it in the first year the car is available for use in your business. Then, in later years, you can choose to use the standard mileage rate or actual expenses.

• Actual Expenses - To use the actual expense method, you must determine what it actually costs to operate the car for the portion of the overall use of the car that's business use. Include gas, oil, repairs, tires, insurance, registration fees, licenses, and depreciation (or lease payments) attributable to the portion of the total miles driven that are business miles.

• Note: Other car expenses for parking fees and tolls attributable to business use are separately deductible, whether you use the standard mileage rate or actual expenses.

 Topic No. 510 Business Use of Car

@tim868868

[tim868868]

Thank you for your reply. I actually understand the depreciation part, just not understand the real meaning of the sentence of form 4562 instructions as quoted "Listed property does not include: 1. ... 2. ... 3. An ambulance, hearse, or vehicle used for transporting persons or property for compensation or hire", and feel it conflicts with other publications, such as Pub. 946.  

[AmeliesUncle]

As an item used for transportation, it is first put under the Listed Property rules.   That is why Publication 946 states that.

As the Instructions to Form 4562 point out, there are exception that can remove it from the Listed Property category.  However, the tax code says that exception is if "substantially all of the use of which is in a trade or business of providing to unrelated persons services consisting of the transportation of persons or property for compensation or hire".

So the key phrase in that is "substantially all".   The idea behind is that if there is any personal use, it is Listed Property.  So things like buses, airplanes, trains, etc. would generally not be listed property because there is no personal use.  If your vehicle is used ONLY for Uber, with no personal use, then you are right, it might qualify as non-listed property.

But as was pointed out, in most cases it probably won't matter anyways.

[ColeenD3]

No, it is not a conflict. You use your personal car for Uber. Taxis, limousines, etc are not personal vehicles.

[tim868868]

@AmeliesUncle Thank you for your explanation. Very sound.

And actually I really rarely use that car for personal use, but definitely not zero. So, to me, probably it makes not much difference since I have to treat it as listed property anyway. 

I asked more for curiosity because IF I had really used it ZERO percent for personal use, and it was converted from previous personal use (therefore not qualified for Section 179), it would not be a listed property nor Sec. 179 property, then how to depreciate? I could not find applicable codes.  

[tim868868]

Eventually I found the ultimate source: the tax code. 

IRC.§ 1.280F-6 (c) (3) clearly indicates that "for compensation or hire" means to what can be included in passenger automobiles, in § 1.280F-6 (b) (1) (ii) still defines "any other property used as a means of transportation" as Listed Property.

So, the 4562 instructions just mean to say "passenger automobiles" exclude taxi or Uber (purely used for Uber).

[DianeW777]

Yes, you are correct.  A vehicle used for hire like taxi or Uber as examples can be excluded from the listed property rules as you discovered in IRS Publication 946 (page 52).

• The following vehicles are not considered passenger automobiles for these purposes. 
  • • An ambulance, hearse, or combination ambulance-hearse used directly in a trade or business. 
  • • A vehicle used directly in the trade or business of transporting persons or property for pay or hire. 
  • • A truck or van that is a qualified nonpersonal use vehicle.