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#24
03-03-2005, 06:30 AM
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 Re: Sole proprietor, can I deduct car accident? "D. Stussy" wrote: - quote - > No. I am saying that habitual negligence is a criminal act,
Real life example: airline pilots and ground vehicle> and reimbursement to another party for damage caused by a > criminal act is sufficiently equal to a fine or penalty that > IRC 162(c)(2) disallows. operators find at times amazing, but ipso facto negligent ways to whack competitors' airplanes or items of airport property -- many times/month. Per FAA in the last 10 days alone, scratch: 4 jetways, 1 service truck, appendages on two B-737s, 1 Airbus APU cone, a B-747 wingtip, one taxiway light, and an innocent runway sign. Now assuming a major air carrier (most of above were) suffers the indignity of cutting checks for the damage several times per year, under any statute you can find, how is this criminal conduct? Even if it somehow were, please cite case law such that repairs to other people's property is disallowed as "sufficiently equal" to a penalty. Reg, Fred F. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#23
02-28-2005, 07:16 PM
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| Re: Sole proprietor, can I deduct car accident? TaxSrv wrote: - quote - > "D. Stussy" wrote:
No. I am saying that habitual negligence is a criminal act,> > Seth Breidbart wrote: > > > It is "ordinary and necessary" to compensate other people > > > for the damage you accidentally cause to their property. If > > > that damage is caused in the course of business, it should > > > be deductible as a business expense. > > However, payments to others on a regular, > > continuous, or substantial basis for causing them harm > > (including their property) is negligence. Payments on the > > basis of [continued] negligence fall under criminal law as a > > penalty and are therefore disallowed per IRC 162(c)(2). > ???. Section 162(c)(2) applies only where the payment > itself is illegal. Are you suggesting that if the > taxpayer/driver were actually charged with misdemeanor > reckless operation, then paying to fix the other person's > car becomes illegal and therefore nondeductible? and reimbursement to another party for damage caused by a criminal act is sufficiently equal to a fine or penalty that IRC 162(c)(2) disallows. IRC 165 additionally does not provide a deduction for ANOTHER taxpayer's loss that one reimburses for. Contrary example: Are you saying that some (all) of the penalties paid by the executives of ENRON should be deductible to them (if not the defunct corporation) because it is an ordinary (and necessary, if caught) event in the life cycle of their scam to defraud? - quote - > And what criminal statute in any state provides that a prior
"Driving without a license" would. For such a habitual> pattern of "regular and continued" driver negligence > elevates ordinary negligence to a crime in a fender-bender > accident? person, the state's DMV is likely (and publically responsible) to pull the license. - quote - > Can you provide court case citations, tax and criminal, to
That will depend on which state has jurisdiction. Granted> support both these positions? all states seem to have parallel laws here. Which of the 50 citations do you want me to start with? :-) - quote - > > If it's accidental, it wasn't "ordinary or necessary."
If there is negligence arising to the criminal level, yes.> Would that mean no 162 deduction for a business owner where > a customers slips and falls, in circumstances unclear as to > his liability, but the owner elects to pay minor medical exp > and lost work time to avoid threatened litigation? Tax > Court citations, please... << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#22
02-23-2005, 03:17 AM
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| Re: Sole proprietor, can I deduct car accident? "D. Stussy" wrote: - quote - > Seth Breidbart wrote:
???. Section 162(c)(2) applies only where the payment> > It is "ordinary and necessary" to compensate other people > > for the damage you accidentally cause to their property. If > > that damage is caused in the course of business, it should > > be deductible as a business expense. > However, payments to others on a regular, > continuous, or substantial basis for causing them harm > (including their property) is negligence. Payments on the > basis of [continued] negligence fall under criminal law as a > penalty and are therefore disallowed per IRC 162(c)(2). itself is illegal. Are you suggesting that if the taxpayer/driver were actually charged with misdemeanor reckless operation, then paying to fix the other person's car becomes illegal and therefore nondeductible? And what criminal statute in any state provides that a prior pattern of "regular and continued" driver negligence elevates ordinary negligence to a crime in a fender-bender accident? Can you provide court case citations, tax and criminal, to support both these positions? - quote - > If it's accidental, it wasn't "ordinary or necessary."
Would that mean no 162 deduction for a business owner wherea customers slips and falls, in circumstances unclear as to his liability, but the owner elects to pay minor medical exp and lost work time to avoid threatened litigation? Tax Court citations, please... Fred F. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#21
02-23-2005, 02:58 AM
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| Re: Sole proprietor, can I deduct car accident? D. Stussy wrote: - quote - > Seth Breidbart wrote:
How often is such a determination adjudicated as fact. We> > D. Stussy <kd6lvw[at]kd6lvw.ampr.org> wrote: > > > A.G. Kalman wrote: > > > > No. We are discussing payment to the other party not the > > > > insured. He was at fault. His insurance company would have > > > > paid the repair bill if the claim was filed. I still believe > > > > that this falls outside of ordinary and necessary. > > > I agree with it falling outside of "ordinary and necessary." > > > > > Unless one is in the habit of playing "demolition derby" on > > > the freeways, it's hardly "ordinary and necessary" to go > > > around damaging other people's property, even with their > > > consent. > > It is "ordinary and necessary" to compensate other people > > for the damage you accidentally cause to their property. If > > that damage is caused in the course of business, it should > > be deductible as a business expense. (Or would you hold > > that the insurance coverage is also not deductible?) > I would hold that the payment BY THE INSURANCE COMPANY > qualifies under IRC 162, and payments of premiums to > insurance also qualify under IRC 162 (and that would include > self-insurance). However, payments to others on a regular, > continuous, or substantial basis for causing them harm > (including their property) is negligence. Payments on the > basis of [continued] negligence fall under criminal law as a > penalty and are therefore disallowed per IRC 162(c)(2). > If it's accidental, it wasn't "ordinary or necessary." are dealing here with opinion of the taxpayer that is the result of facts that we do not know here. Sometimes prompt payment of small "claims" can lead to significantly lower total insurance, including self insurance, cost. Legal payments made to minimize business expense are ordinary and necessary. -- Frederick E. Jorden http://Tax-Accounting-Payroll.com 7825 Midlothian Tpk - 207 Richmond, VA 23235-5247 EMAIL knowtax[at]bigfoot.com (804) 320-6210 FAX (804) 320-6211 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#20
02-21-2005, 09:01 AM
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| Re: Sole proprietor, can I deduct car accident? Frederick Jorden wrote: - quote - > D. Stussy wrote:
Are you saying that taxi companies regularly ("ordinarily> > A.G. Kalman wrote: > > > b milton wrote: > > > > "A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote: > > > > > Guitarzoid wrote: > > > > > > I am a sole proprietor of a plumbing business and got into a > > > > > > fender bender while going to one job to the next. It was my > > > > > > fault and rather than making a police report or going > > > > > > through the insurance I just paid the other person 300 > > > > > > dollars. Can I deduct that as a business expense? > > > > > If you were self-insured and paid $300 for damages caused > > > > > while operating your truck for business, the payment would > > > > > be an ordinary and necessary business expense (deductible) > > > > > of your business. As you were not self-insured (you carried > > > > > insurance) and you elected to avoid notifying your insurance > > > > > company, I don't believe your expense would be deductible as > > > > > an ordinary and necessary expense. > > > > Would your answer change if his deductible for his insurance > > > > was $500? > > > No. We are discussing payment to the other party not the > > > insured. He was at fault. His insurance company would have > > > paid the repair bill if the claim was filed. I still believe > > > that this falls outside of ordinary and necessary. > > I agree with it falling outside of "ordinary and necessary." > > > Unless one is in the habit of playing "demolition derby" on > > the freeways, it's hardly "ordinary and necessary" to go > > around damaging other people's property, even with their > > consent. I also know of no provision of IRC 165 that allows > > for a taxpayer to deduct compensation paid to another > > taxpayer for the latter's loss. [Insurance companies use > > IRC 162 for such is the nature of their business.] > > > Now if this was the case of his truck being damaged by an > > > uninsured motorist and he had a deductible of $500 and paid > > > out of pocket $300 to make repairs, I would agree that the > > > payment is tax deductible. > > I don't find that relevant as those repairs are to the other > > party's vehicle, not his own. Repairs to his OWN vehicle of > > less than the insurance deductible would be OK. > Does that mean that self insured businesses cannot deduct > claims expenses. I guess I have to go back and amend several > hundred taxi corporation returns? and necessarily") go around getting into auto accidents as part of their business activities? If so, the states' DMVs should be pulling their licenses. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#19
02-21-2005, 09:01 AM
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| Re: Sole proprietor, can I deduct car accident? Seth Breidbart wrote: - quote - > D. Stussy <kd6lvw[at]kd6lvw.ampr.org> wrote:
I would hold that the payment BY THE INSURANCE COMPANY> > A.G. Kalman wrote: > > > No. We are discussing payment to the other party not the > > > insured. He was at fault. His insurance company would have > > > paid the repair bill if the claim was filed. I still believe > > > that this falls outside of ordinary and necessary. > > I agree with it falling outside of "ordinary and necessary." > > > Unless one is in the habit of playing "demolition derby" on > > the freeways, it's hardly "ordinary and necessary" to go > > around damaging other people's property, even with their > > consent. > It is "ordinary and necessary" to compensate other people > for the damage you accidentally cause to their property. If > that damage is caused in the course of business, it should > be deductible as a business expense. (Or would you hold > that the insurance coverage is also not deductible?) qualifies under IRC 162, and payments of premiums to insurance also qualify under IRC 162 (and that would include self-insurance). However, payments to others on a regular, continuous, or substantial basis for causing them harm (including their property) is negligence. Payments on the basis of [continued] negligence fall under criminal law as a penalty and are therefore disallowed per IRC 162(c)(2). If it's accidental, it wasn't "ordinary or necessary." << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#18
02-21-2005, 05:50 AM
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| Re: Sole proprietor, can I deduct car accident? TaxSrv wrote: - quote - > "Frederick Jorden" wrote:
Valid does come into play when the business owner tries to> > ... > > Are you saying that the self-insured businesses cannot > > deduct valid claims paid? > Not at all. I don't think even "valid" has anything to do > with a business judgment to pay off small claims, even > borderline frivolous. A business which has a policy > deductible for liability claims thus self-insures by > default. claim a new motorcycle for his son and there was no accident report. -- Frederick E. Jorden http://Tax-Accounting-Payroll.com 7825 Midlothian Tpk - 207 Richmond, VA 23235-5247 EMAIL knowtax[at]bigfoot.com (804) 320-6210 FAX (804) 320-6211 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#17
02-18-2005, 11:14 AM
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| Re: Sole proprietor, can I deduct car accident? "Frederick Jorden" wrote: - quote - > ...
Not at all. I don't think even "valid" has anything to do> Are you saying that the self-insured businesses cannot > deduct valid claims paid? with a business judgment to pay off small claims, even borderline frivolous. A business which has a policy deductible for liability claims thus self-insures by default. Fred F. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#16
02-16-2005, 11:55 PM
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| Re: Sole proprietor, can I deduct car accident? D. Stussy <kd6lvw[at]kd6lvw.ampr.org> wrote: - quote - > A.G. Kalman wrote:
It is "ordinary and necessary" to compensate other people> > No. We are discussing payment to the other party not the > > insured. He was at fault. His insurance company would have > > paid the repair bill if the claim was filed. I still believe > > that this falls outside of ordinary and necessary. > I agree with it falling outside of "ordinary and necessary." > Unless one is in the habit of playing "demolition derby" on > the freeways, it's hardly "ordinary and necessary" to go > around damaging other people's property, even with their > consent. for the damage you accidentally cause to their property. If that damage is caused in the course of business, it should be deductible as a business expense. (Or would you hold that the insurance coverage is also not deductible?) Seth << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#15
02-16-2005, 11:17 PM
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| Re: Sole proprietor, can I deduct car accident? - quote - > > ...
Are you saying that the self-insured businesses cannot> > > No. We are discussing payment to the other party not the > > > insured. He was at fault. His insurance company would > > > have paid the repair bill if the claim was filed. I still > > > believe that this falls outside of ordinary and necessary. > > I agree with it falling outside of "ordinary and necessary." > > > I also know of no provision of IRC 165 that allows > > for a taxpayer to deduct compensation paid to another > > taxpayer for the latter's loss. > But section 162 allows for meeting obligations arising out > of tort liability, no? Say a business asset falls off your > business trailer, whacking the vehicle behind you, and your > auto coverage won't cover that because you didn't tell them > about the trailer. Or how about a self-employed t/p who > meets a state's financial responsibility laws to be > self-insured, and causes damage to a third-party vehicle > while driving on business? There's no rule of tax law > either where if you cause an accident in such cases, you > must insist the other party's insurance company pay under > collision coverage. Their ins co will have a contrary view > on the matter. deduct valid claims paid? -- Frederick E. Jorden http://Tax-Accounting-Payroll.com 7825 Midlothian Tpk - 207 Richmond, VA 23235-5247 EMAIL knowtax[at]bigfoot.com (804) 320-6210 FAX (804) 320-6211 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#14
02-15-2005, 06:47 AM
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| Re: Sole proprietor, can I deduct car accident? - quote - > ...
But section 162 allows for meeting obligations arising out> > No. We are discussing payment to the other party not the > > insured. He was at fault. His insurance company would > > have paid the repair bill if the claim was filed. I still > > believe that this falls outside of ordinary and necessary. > I agree with it falling outside of "ordinary and necessary." > I also know of no provision of IRC 165 that allows > for a taxpayer to deduct compensation paid to another > taxpayer for the latter's loss. of tort liability, no? Say a business asset falls off your business trailer, whacking the vehicle behind you, and your auto coverage won't cover that because you didn't tell them about the trailer. Or how about a self-employed t/p who meets a state's financial responsibility laws to be self-insured, and causes damage to a third-party vehicle while driving on business? There's no rule of tax law either where if you cause an accident in such cases, you must insist the other party's insurance company pay under collision coverage. Their ins co will have a contrary view on the matter. Fred F. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#13
02-15-2005, 06:09 AM
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| Re: Sole proprietor, can I deduct car accident? D. Stussy wrote: - quote - > A.G. Kalman wrote:
Does that mean that self insured businesses cannot deduct> > b milton wrote: > > > "A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote: > > > > Guitarzoid wrote: > > > > > I am a sole proprietor of a plumbing business and got into a > > > > > fender bender while going to one job to the next. It was my > > > > > fault and rather than making a police report or going > > > > > through the insurance I just paid the other person 300 > > > > > dollars. Can I deduct that as a business expense? > > > > If you were self-insured and paid $300 for damages caused > > > > while operating your truck for business, the payment would > > > > be an ordinary and necessary business expense (deductible) > > > > of your business. As you were not self-insured (you carried > > > > insurance) and you elected to avoid notifying your insurance > > > > company, I don't believe your expense would be deductible as > > > > an ordinary and necessary expense. > > > Would your answer change if his deductible for his insurance > > > was $500? > > No. We are discussing payment to the other party not the > > insured. He was at fault. His insurance company would have > > paid the repair bill if the claim was filed. I still believe > > that this falls outside of ordinary and necessary. > I agree with it falling outside of "ordinary and necessary." > Unless one is in the habit of playing "demolition derby" on > the freeways, it's hardly "ordinary and necessary" to go > around damaging other people's property, even with their > consent. I also know of no provision of IRC 165 that allows > for a taxpayer to deduct compensation paid to another > taxpayer for the latter's loss. [Insurance companies use > IRC 162 for such is the nature of their business.] > > Now if this was the case of his truck being damaged by an > > uninsured motorist and he had a deductible of $500 and paid > > out of pocket $300 to make repairs, I would agree that the > > payment is tax deductible. > I don't find that relevant as those repairs are to the other > party's vehicle, not his own. Repairs to his OWN vehicle of > less than the insurance deductible would be OK. claims expenses. I guess I have to go back and amend several hundred taxi corporation returns? -- Frederick E. Jorden http://Tax-Accounting-Payroll.com 7825 Midlothian Tpk - 207 Richmond, VA 23235-5247 EMAIL knowtax[at]bigfoot.com (804) 320-6210 FAX (804) 320-6211 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#12
02-14-2005, 12:09 AM
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| Re: Sole proprietor, can I deduct car accident? A.G. Kalman wrote: - quote - > b milton wrote:
I agree with it falling outside of "ordinary and necessary."> > "A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote: > > > Guitarzoid wrote: > > > > I am a sole proprietor of a plumbing business and got into a > > > > fender bender while going to one job to the next. It was my > > > > fault and rather than making a police report or going > > > > through the insurance I just paid the other person 300 > > > > dollars. Can I deduct that as a business expense? > > > If you were self-insured and paid $300 for damages caused > > > while operating your truck for business, the payment would > > > be an ordinary and necessary business expense (deductible) > > > of your business. As you were not self-insured (you carried > > > insurance) and you elected to avoid notifying your insurance > > > company, I don't believe your expense would be deductible as > > > an ordinary and necessary expense. > > Would your answer change if his deductible for his insurance > > was $500? > No. We are discussing payment to the other party not the > insured. He was at fault. His insurance company would have > paid the repair bill if the claim was filed. I still believe > that this falls outside of ordinary and necessary. Unless one is in the habit of playing "demolition derby" on the freeways, it's hardly "ordinary and necessary" to go around damaging other people's property, even with their consent. I also know of no provision of IRC 165 that allows for a taxpayer to deduct compensation paid to another taxpayer for the latter's loss. [Insurance companies use IRC 162 for such is the nature of their business.] - quote - > Now if this was the case of his truck being damaged by an
I don't find that relevant as those repairs are to the other> uninsured motorist and he had a deductible of $500 and paid > out of pocket $300 to make repairs, I would agree that the > payment is tax deductible. party's vehicle, not his own. Repairs to his OWN vehicle of less than the insurance deductible would be OK. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#11
02-11-2005, 07:24 AM
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| Re: Sole proprietor, can I deduct car accident? b milton wrote: - quote - > "A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote:
Hmmmm.. Uh.. let's see now. I don't think that liability> > Guitarzoid wrote: > > > I am a sole proprietor of a plumbing business and got into a > > > fender bender while going to one job to the next. It was my > > > fault and rather than making a police report or going > > > through the insurance I just paid the other person 300 > > > dollars. Can I deduct that as a business expense? > > If you were self-insured and paid $300 for damages caused > > while operating your truck for business, the payment would > > be an ordinary and necessary business expense (deductible) > > of your business. As you were not self-insured (you carried > > insurance) and you elected to avoid notifying your insurance > > company, I don't believe your expense would be deductible as > > an ordinary and necessary expense. > Would your answer change if his deductible for his insurance > was $500? coverage is ever subject to a deductible. Is it? ChEAr$, Harlan Lunsford, EA n LA Thu 10 Feb 2005 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#10
02-11-2005, 07:04 AM
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| Re: Sole proprietor, can I deduct car accident? Frederick Jorden wrote: - quote - > A.G. Kalman wrote:
You're a man after me own heart, Frederick. GMTA.> > Guitarzoid wrote: > > > I am a sole proprietor of a plumbing business and got into a > > > fender bender while going to one job to the next. It was my > > > fault and rather than making a police report or going > > > through the insurance I just paid the other person 300 > > > dollars. Can I deduct that as a business expense? > > If you were self-insured and paid $300 for damages caused > > while operating your truck for business, the payment would > > be an ordinary and necessary business expense (deductible) > > of your business. As you were not self-insured (you carried > > insurance) and you elected to avoid notifying your insurance > > company, I don't believe your expense would be deductible as > > an ordinary and necessary expense. > Given how insurance companies delight in cancellation of > policies I could see the $300 payment as an ordinary and > necessary business expense. Frequent small claims can lead > to very substantial premium increases. ChEAr$, Harlan Lunsford, EA n LA Thu 10 Feb 2005 << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#9
02-11-2005, 06:45 AM
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| Re: Sole proprietor, can I deduct car accident? b milton wrote: - quote - > "A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote:
No. We are discussing payment to the other party not the> > Guitarzoid wrote: > > > I am a sole proprietor of a plumbing business and got into a > > > fender bender while going to one job to the next. It was my > > > fault and rather than making a police report or going > > > through the insurance I just paid the other person 300 > > > dollars. Can I deduct that as a business expense? > > If you were self-insured and paid $300 for damages caused > > while operating your truck for business, the payment would > > be an ordinary and necessary business expense (deductible) > > of your business. As you were not self-insured (you carried > > insurance) and you elected to avoid notifying your insurance > > company, I don't believe your expense would be deductible as > > an ordinary and necessary expense. > Would your answer change if his deductible for his insurance > was $500? insured. He was at fault. His insurance company would have paid the repair bill if the claim was filed. I still believe that this falls outside of ordinary and necessary. Now if this was the case of his truck being damaged by an uninsured motorist and he had a deductible of $500 and paid out of pocket $300 to make repairs, I would agree that the payment is tax deductible. -- Alan http://taxtopics.net << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#8
02-11-2005, 06:26 AM
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| Re: Sole proprietor, can I deduct car accident? b milton <knuckles145[at]gmail.com> wrote: - quote - > "A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote:
In that case the insurance wouldn't cover it.> > Guitarzoid wrote: > > > I am a sole proprietor of a plumbing business and got into a > > > fender bender while going to one job to the next. It was my > > > fault and rather than making a police report or going > > > through the insurance I just paid the other person 300 > > > dollars. Can I deduct that as a business expense? > > If you were self-insured and paid $300 for damages caused > > while operating your truck for business, the payment would > > be an ordinary and necessary business expense (deductible) > > of your business. As you were not self-insured (you carried > > insurance) and you elected to avoid notifying your insurance > > company, I don't believe your expense would be deductible as > > an ordinary and necessary expense. > Would your answer change if his deductible for his insurance > was $500? What if his deductible were $250, but making the claim would cause his insurance rates to rise by $100/year? In that case, I'd say an argument could be made that the loss wasn't covered. Seth << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#7
02-10-2005, 07:27 AM
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| Re: Sole proprietor, can I deduct car accident? "A.G. Kalman" <glendale202-mtm[at]yahoo.com> wrote: - quote - > Guitarzoid wrote:
Would your answer change if his deductible for his insurance> > I am a sole proprietor of a plumbing business and got into a > > fender bender while going to one job to the next. It was my > > fault and rather than making a police report or going > > through the insurance I just paid the other person 300 > > dollars. Can I deduct that as a business expense? > If you were self-insured and paid $300 for damages caused > while operating your truck for business, the payment would > be an ordinary and necessary business expense (deductible) > of your business. As you were not self-insured (you carried > insurance) and you elected to avoid notifying your insurance > company, I don't believe your expense would be deductible as > an ordinary and necessary expense. was $500? Beth M. << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#6
02-10-2005, 07:08 AM
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| Re: Sole proprietor, can I deduct car accident? Thomas Healy wrote: - quote - > "Guitarzoid" <guitarzoid[at]aol.com> wrote:
Form 4684 is for damage to one's own property, if memory> > I am a sole proprietor of a plumbing business and got into a > > fender bender while going to one job to the next. It was my > > fault and rather than making a police report or going > > through the insurance I just paid the other person 300 > > dollars. Can I deduct that as a business expense? > Maybe. The instructions for Form 4684 (the one to report > casualties) asks for the police case number and whether the > claim could have been covered by insurance. To the extent > your insurance could have paid the claim you have no tax > deduction. serves, and admittedly, SOMEtimes it don't! lol ChEAr$, Harlan Lunsford, EA n LA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
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#5
02-10-2005, 06:10 AM
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| Re: Sole proprietor, can I deduct car accident? Paul A Thomas wrote: - quote - > "Guitarzoid" <guitarzoid[at]aol.com> wrote
Please note, this relates to expense of the other's vehicle,> > I am a sole proprietor of a plumbing business and got into a > > fender bender while going to one job to the next. It was my > > fault and rather than making a police report or going > > through the insurance I just paid the other person 300 > > dollars. Can I deduct that as a business expense? > Not if you use the mileage method of deducting your vehicle > expenses. and not the OP's truck. - quote - > Otherwise yes, as a vehicle repair, etc.
How the taxpayer deducts his expenses has nothing to do with> You had better have proof, like a check, and something to > support the expense. the payments in this case. ChEAr$, Harlan Lunsford, EA n LA << -------------------------------------------------> << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org > << -------------------------------------------------> |
| Tags |
| accident, car, deduct, proprietor, sole |
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| Thread | Forum | Replies | Last Post | |
| A couple of questions on sole proprietor k. v. n.: I am thinking to quit my software engineer job and work as an independent contractor. For that I think I need to register as a sole proprietor. ... | Taxes | 3 | 04-19-2004 07:08 PM | |
| Sole Proprietor with no income: File Sch. C? DaveR: I had been a sole proprietor for 7 years, receiving consulting income via 1099-MISC. This year, I did not receive any 1099-MISC income, as my... | Taxes | 5 | 12-17-2003 08:07 AM | |
| Sole proprietor nees to pay both personal and business income tax? vector_sigma: Hi all: I am currently a sole proprietor, and I have a TIN number. I have never been married, and I live in California. The big question about... | Taxes | 1 | 09-23-2003 10:48 AM | |
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