Tim wrote:

- quote -

Here's what the IRS pub on business expenses says about
this:

"Parking fees, tolls, interest, and taxes. Parking fees and
tolls attributable to use of the automobile for business
purposes may be deducted as separate items. Likewise,
interest relating to the purchase of the automobile as well
as state and local personal property taxes may be deducted
as separate items, but only to the extent allowable under
section 163 or 164, respectively. Section 163(h)(2)(A)
expressly provides that interest is nondeductible personal
interest if it is paid or accrued on indebtedness properly
allocable to the trade or business of performing services as
an employee. ... If the automobile is operated less than
100 percent for business purposes, an allocation is required
to determine the business and nonbusiness portion of the
taxes and interest deduction allowable."

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You are entitled to deduct interest paid on a business
vehicle, regardless of which method you choose for vehicle
expenses, so long as you are self employed. The authority
within the Code to deduct interest related to a trade or
business, or a passive activity such as a rental is
completely separate from that for vehicle expenses. As with
any other deduction of interest, however, you must properly
allocate its use proportionally, as mentioned by Mr. Thomas.

Tim

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"MDinDestin" <mdindestin[at]hotmail.com> wrote

- quote -

If so, it's computed as a percentage based on business miles
/ total miles.

--
Paul Thomas, CPA
paulthomascpapc[at]bellsouth.net

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San Diego CPA wrote:
- quote -

Next question will be; "can I take depreciation also?"

One of my clients wasn't pleased with my answer and went
"back" to his previous preparer (who said she was a CPA from
Los Angeles btw) who allowed it and the mileage rate.
(However I checked the Georgia secretary of state's web site
and she was NOT registered as a CPA in the state she
"practices". or mis practices.

ChEAr$,
Harlan Lunsford, EA n LA

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"MDinDestin" <mdindestin[at]hotmail.com> wrote:

- quote -

No. you're taking mileage therefore, you don't get other
auto-related expenses such as gas, maintenance, insurance,
depreciation or interest.

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I have a rental property located in another state.

I always take the standard mileage deduction for the miles
spent driving to check on the property. I also deduct my
meals and other travel expenses.

My tax preparation software is leading me down a path to
deduct a portion of the loan interest on the vehicle. My
former tax preparer never asked me about loan interest.

We have a family car that I used to drive about 500 miles
round trip to check on the rental property twice last year.

Can I deduct a portion of the loan interest paid on this
vehicle? If so, how is it calculated.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >