Family purchased a car in 2015 for family use (travel to employment, etc) for about 16000. No depreciation was taken in business taxes.
In 2020 (once pandemic hit) the car usage pattern changed to over 51% business use. It has stayed at over 51% business use through now.
Miles driven for business are low-ish, though, at about 4000-5000 miles annually.
Congress enacted 100% bonus depreciation rules for some kinds of property valid 2018- December 2022.
(https://www.irs.gov/newsroom/new-rules-and-limitations-for-depreciation-and-expensing-under-the-tax-...)
Questions:
1. Given the car was purchased in 2015, and went into 51% or more business use in 2020, might it be POSSIBLE or advantageous to take the 100% deduction on the car cost in Tax Year 2020? In other words, can it be treated as long-term property and get that 100% deduction?
2. Would the cost basis of the car in year 20XX be a value linearly reduced from the $16000 of 2015? In that case there would not be any cost basis left to use for a 100% bonus deduction, and I should just take the standard mileage deduction?
3. If it qualifies for that 100% deduction, can I choose to take the 100% deduction retroactively, e.g. from 2016 onwards? I am VERY confused on whether the tax changes for 2018 allowed retroactive application of deductions? Confused about retroactive stuff in general 🙂
Thank you.
