That is correct.
Once you bought-out the lease, it is as if you purchased a totally different vehicle.
Dispose of the leased vehicle, this will be a non-taxable event.
Enter the vehicle as if you just purchased it used.
When you dispose THIS vehicle, you may have a taxable event since depreciation you claim may be needed to be "recaptured".
Once the vehicle is entered the second time, you may choose Standard Mileage or Actual Expenses.
If you use the Standard Rate be sure to keep a log for your miles driven and the miles you claim on your tax returns. Part of the Standard Mileage Rate includes "depreciation equivalent" which is factored in when the vehicle is sold.
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