Hypothetical question for the future... On Auto depreciation and deduction

[hameshatumkochaha]

Hi,

Currently we own a 2001 Honda and 2017 Kia made car.  The latter (2017 Kia) has been used 50+% for our business A for the last 5+ years and I assume will not be deductible anymore for the business starting the next year (2024).  

We started a business B in the year 2022 for which we use the 2001 Honda for ~10%.  

In the year 2024, we intend to start a new business C which will require the larger (Kia) to be used for 70+% while the smaller (2001 Honda) will likely be used for business A primarily and very little (same as the last year) for business B.  

Questions:

1. Is 2001 Honda expenses deductible for the year 2022 though the use is ~10% for business B? 

2. Is 2001 Honda depreciable for the year 2022 through the use is ~10% for business B?  

3. Once we start the business C with the car arrangements as listed above: Can we depreciate 2017 Kia against business C (though it has been depreciated for 5 years on business A, also fully owned by us)? 

4. Once we start the business C with the car arrangements as listed above: Can we depreciate 2001 Honda against business A (we can ignore business B contributions if it is complicated as the monetarily it won't be much).

Is there any guideline I should follow so I can plan better and ensure that everything is clean?  

Please note that all taxes are filed as married filing jointly, businesses A and C will have Schedule C while Business B is a rental with schedule E. 

Thanks,

[Vanessa A]

1. Is 2001 Honda expenses deductible for the year 2022 though the use is ~10% for business B?  If you have previously depreciated this vehicle, then you would be able to claim 10% of the expenses in the business you are using it for.  If you have not depreciated it and are using the standard  mileage deduction, then you just need to track your miles used for business and deduct the mileage instead of the expenses. 

2. Is 2001 Honda depreciable for the year 2022 through the use is ~10% for business B?  If you have not previously used the Honda and have not depreciated it prior, you would need to use the value as of now to depreciate it, not the value of when you bought it, unless of course you just bought it. 

3. Once we start the business C with the car arrangements as listed above: Can we depreciate 2017 Kia against business C (though it has been depreciated for 5 years on business A, also fully owned by us)? No, you have already depreciated this vehicle.  You cannot depreciate a fully depreciated vehicle. You can claim the actual expenses you incur each year such as tires and oil changes.  You would need to prorate the expense based on usage. 

4. Once we start the business C with the car arrangements as listed above: Can we depreciate 2001 Honda against business A (we can ignore business B contributions if it is complicated as the monetarily it won't be much).

Is there any guideline I should follow so I can plan better and ensure that everything is clean?  

You cannot depreciate one vehicle more than once.  If you took depreciation on a vehicle, once it is fully depreciated, you can only take the actual expenses incurred for the vehicle.

If you are placing a vehicle in service for the first time in a tax year, you can choose to use the standard mileage deduction instead of depreciation.  You cannot change from depreciation to standard mileage, but you can change from standard mileage to depreciation. You also cannot take both in the same year.