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fasteddie577
Level 5

Vehicle Cost Basis

Do I need to know the cost basis of a vehicle if I a going with actual vehicle expenses?

FYI, purchased vehicle in 2016, but did not start using it in the business until 2018.


Thanks

1 Best answer

Accepted Solutions
Leonard
Intuit Alumni

Vehicle Cost Basis

No, you do not need to know the cost basis if you are using the actual expenses or standard mileage method to determine vehicle cost. If you ever want to switch between standard mileage rate and actual expenses you have to you used the standard mileage rate for the first year your vehicle was in service. After that, you can calculate both methods and use whichever gives you a larger deduction. If you use the actual expense method the first year, you must use it for the life of the vehicle.

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3 Replies
Leonard
Intuit Alumni

Vehicle Cost Basis

No, you do not need to know the cost basis if you are using the actual expenses or standard mileage method to determine vehicle cost. If you ever want to switch between standard mileage rate and actual expenses you have to you used the standard mileage rate for the first year your vehicle was in service. After that, you can calculate both methods and use whichever gives you a larger deduction. If you use the actual expense method the first year, you must use it for the life of the vehicle.

fasteddie577
Level 5

Vehicle Cost Basis

Thank you TurboTaxLeonard.
Leonard
Intuit Alumni

Vehicle Cost Basis

You are welcome
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