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Green light for switching to business use

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Q. Can I convert a personal pickup truck into a business vehicle and be able to claim tax deductions? S.T., Laguna Beach, Calif.

A. Yes. You can claim depreciation deductions for a converted vehicle placed into service this year. Your basis for depreciation purposes is the lesser of the fair market value (FMV) of the property on the date it is first used for business or your adjusted basis. For example, if you bought the pickup three years ago for $30,000 and its FMV, based on Blue Book value, is $20,000, your basis for depreciation purposes is $20,000 once you start using it for business.

Tip: In any event, deductions for vehicles may be limited under the so-called “luxury car” rules.

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