Vehicle expense for business

[KC0419]

If parent gave child their vehicle and child used for their business, can child claim mileage expense when the title was not transferred to child 

Secondly, If vehicle was salvaged a year later,  how to handle vehicle “not used for business anymore” when they didn’t purchase the vehicle,  it was given to them.  

[Mike9241]

i would say that the child can use the actual expense method since they don't own the vehicle. It's like they renting it for $0.

hope they have records to support business use and expenses. the actual expense method is based on business mileage to their total mileage. 

in the salvage year, they would use the same method.  in the subsequent year just delete the vehicle.  

[KC0419]

Thanks for the feedback.  If I understand correctly, she can't use milage expense even though she tracked her mileage because she didn't own the car.  Also, looks like she can't salvage it either since she is not the owner (ie. didn't own the title) even though it was given to her and she had exclusive use of vehicle.   Thanks.

[KrisD15]

Correct.

The Standard Mileage rate has a "Depreciation Equivalent" built into the rate, and depreciation cannot be taken on an asset that is not owed by the Business / Business owner. 

She would not benefit from the salvage since she has no basis in the asset (since she was never legally the owner).

She CAN claim part of the insurance she paid on the vehicle as well as gas and repairs. These actual expenses must be allocated by percentage of business use. If she spent $400 in gas and drove 10,000 during the year, 5,000 of which were business miles, she would claim 200 in fuel expense and 50% of the other expenses she paid relating to the vehicle.