KrisD15
Expert Alumni

Deductions & credits

If you use mileage only, the deduction will be 58.5 cents per business mile driven the first half of 2022 and 62.5 cents for the business miles driven the second half of 2022. 

 

Multiply the mileage by the rate. (.585 or .625)  Only use the miles you drove for business purposes. 

 

Please be aware that .26 per mile of that is a "Depreciation Equivalent"

What does that mean? 

Although this is not a 100% business vehicle, when you sell the truck, you will need to adjust your basis for the depreciation and claim a income if applicable. 

 

So if you bought the trunk for 40,000, used it for business purposes for 5000 miles all the second half of 2022, you would expense $3,125, plus other expenses, like toll and parking. (5,000 X .625 = 3125)

 

If you sell the truck for 38,000 you would have a 1,125 "Depreciation Recapture" which would be ordinary income. Basis less depreciation taken (or could have been taken) equals Adjusted Basis - Selling proceeds  Adjusted less basis equals income) 

(40,000 - 3125 = 36,875          38,000 - 36,875 = 1125)

 

Vehicles usually don't hold their value, so you may never need to claim any income from depreciation (nor any capital gain) but it's good to know

 

This would only be something you would need to address when you sell the vehicle, not simply when you stop using it for your business. 

 

 

 

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