"Katie" <katiej_1958[at]yahoo.com> wrote:

- quote -

Yes. It took a _lot_ of complaining from a _lot_ of us long
time usenet users to get them to change the default mode.

--
-Ernie-

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"Stuart A. Bronstein" <spamt...[at]lexregia.com> wrote:
- quote -

Actually, the regular "reply" function in Google Groups
automatically quotes the prior post now. That's fairly new.

Katie in San Diego

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"Shyster1040" <Shyster1040[at]nospamhotmail.com> wrote:

- quote -

I doubt anyone was offended. Sometimes it's just hard to
follow what's going on if you don't quote what you are
responding to.

- quote -

If you use groups.google.com there's an option that
automatically quotes. Or you could use a real news reader -
check out http://news.individual.net/ - the cost is nominal
and they do a great job. (Well, they don't carry any of the
binary groups, so no photos. But aside from that.)

Stu

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

I, too, wish Shyster would quote what he is responding to.
That has been a particular problem for people posting with
google, though they have change it now and quoting is easier
than it used to be.

Vic, he was apparently responding to your post that said,

- quote -

Stu

To all whom I have offended, my sincere apologies.

The site I generally go through, www.talkabouttaxes.com,
does not (as far as I can tell) provide a quotation
mechanism for the post that is being responded to.
Typically, I try to do cut-n-paste for the material I'm
responding to, but I don't always remember to do so.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"Shyster1040" <Shyster1040[at]nospamhotmail.com> wrote:

- quote -

It seems you were replying to my post, so ....

If the car is owned or leased by the employee and is
therefore NOT owned by the business but is used part time
for business purposes, isn't the employee allowed to claim
the IRS Standard Mileage Rate in lieu of the proportional
amount of gas, depreciation, insurance, etc. ?

- quote -

Since the car is not owned by the business AND only the IRS
Standard Mileage Rate was used by the employee to recover
the costs of using their personal car for business purposes,
my reading of Pub 463 is that the sale of the car is not a
tax event of any kind.

When you state that the OP must recover depreciation do you
mean for a personally-owned or leased car for which the only
deduction was the IRS Standard Mileage Rate?

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

"Stuart A. Bronstein" <spamtrap[at]lexregia.com> wrote:
- quote -

Thanks Stu.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Victor Roberts <xxx[at]lighting-research.com> wrote:
- quote -

I, too, wish Shyster would quote what he is responding to.
That has been a particular problem for people posting with
google, though they have change it now and quoting is easier
than it used to be.

Vic, he was apparently responding to your post that said,

- quote -

Stu

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"Shyster1040" <Shyster1040[at]nospamhotmail.com> wrote:

- quote -

Who is "you"?

You seem to have replied to your own post and did not
include any quoted material.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

You're missing the main point. If the car was solely used
for personal use, the OP could not have taken any deductions
for it, not actual expenses and depreciation, nor as an
alternative the standard mileage rate. Since she did use it
3/4 for business-use, and since she did take the standard
mileage deduction, it necessarily relates to her business
affairs.

Second, since it was used in her business, when she sells
the car she must recapture any depreciation she took, either
directly or indirectly via the standard mileage deduction,
to the extent of the lesser of her gain or the amount of
depreciation allowed.

In this case, based on the mileage figures the OP stated,
the cost basis of the car has probably been reduced to $0 by
now (although that will depend on how long she had the car,
used it for business, and how much she originally paid for
it).

As a result, unless she traded the car in for a new car, in
which case the like-kind exchange rules will apply, most or
all of the $4,000 she received on sale of the car would
represent recaptured depreciation and, as a result, would be
treated as ordinary taxable income in the year of receipt.

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"Bill Brown" <brownwp[at]longwood.edu> wrote:

- quote -

I'm not one of the many tax pros here but this whole
discussion conflicts with my meager understanding of Pub
463. If the OP used the Standard Mileage Rate for a car she
owned then it seems that the sale of the car is not relevant
to her business taxes at all. She must have entered
something incorrectly into TurboTax.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Justin"
<jwvinp[at]aol.com> wrote:

- quote -

[snip]

- quote -

Is this your personal car or a "business" car. That is, did
you deduct the purchase price as a business expense when you
purchased the car?

If the cost of price of the car was never deducted as a
business expense I believe my previous answer is correct -
the sale of the car has no business tax impact if you have
been taking the Standard Mileage Rate.

--
Vic Roberts
Replace xxx with vdr in e-mail address.

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >

Justin wrote:

- quote -

If you sold it; i.e. did not trade it in on the new car then
your gain would be the sales price minus your 'adjusted
basis.' Your basis would be the original total
cost(including the loan) minus depreciation allowable. If
you paid $ 20,000 for the old car and sold it for $ 10,000
and had allowable depreciation of $ 5000, your adjusted
basis would be $15,000 and you would have a $5000 loss--but
only the business percent of the loss would be deductable.
If you had a gain, the gain up to the amount of depreciation
would be ordinary income and any additional gain would be a
capital gain.

If the sale and purchase were considered as a trade-in, the
gain or loss would not be reported, but would be an
adjustment to the basis of the new car.

You may need to consult a CPA in order to get this all
clarified and correctly reported. Turbo tax cannot do your
taxes correcgtly unless you know how to input the figures.

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Just to correct my earlier post - unfortunately I passed
over the part about the OP taking the standard mileage
deduction without taking that fact into account in my
answer.

As a result, you have already claimed depreciation on the
car because the standard mileage deduction includes
depreciation. In addition, the standard mileage deduction
effectively permits you to depreciate that part of the cost
of the car that would ordinarily be nondepreciable because
it represented the "part" of the car used for personal use.

However, the amount of depreciation that was included in the
standard mileage deduction you took varied from year to year,
so you should do the actual calculations to see what result
you get. To see an example, see IRS Pub. 463, available at:
http://www.irs.gov/publications/p463

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To reiterate what Paul Thomas and I said, the standard
mileage rate includes a component for depreciation that
reduces the owner's basis in the automobile. If business use
is great enough, the owner can easily have a gain on
disposal of that care.

Wile Coyote mentioned the possibility of a like-kind
exchange. That requires the taxpayer to have traded the car
in a partial payment for a new car, and not "sold the car
this year and bought another car."

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"Justin" <jwvinp[at]aol.com> wrote:

- quote -

As I don't have all the info for your retuen, I can only
speculate on whats going on. The one thing that does catch
my eye is this.

"I sold the car this year and bought another car."

typically this would be called a like kind exchange, anbd no
gain/loss would be figured on the exchange.

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"Justin" <jwv...[at]aol.com> wrote:

- quote -

Somewhere TT must ask for your basis in the car, which is
the amount you originally paid for it, less any allowed or
allowable depreciation. Since you have always claimed the
mileage allowance, I don't think you need to take any
depreciation into account. The balance due on the loan is
irrelevant. The gain or loss on the sale of the car is the
amount you received for it, minus what you paid for it.
That's almost certainly a loss. Since you did not treat the
car as a business asset, it's a personal loss and not
deductible.

Katie in San Diego

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"Justin" <jwv...[at]aol.com> wrote:

- quote -

The existence of a loan is irrelevant.

- quote -

The standard mileage includes a depreciation component.
That's why you ended up with a gain on the disposal of your
old car.

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The problem is that in previous years you didn't claim the
allowable depreciation on the car.

The fact that you had a loan on the car and paid it off, by
itself, is irrelevant. For tax purposes, even though you
borrowed the money, you were given a basis in the vehicle
equal to the purchase price just as if you had spent your
own money instead of borrowed money.

Had you claimed the allowable depreciation, your taxes for
the prior years would have been reduced, and the basis of
the car would have been reduced accordingly.

However, even if you didn't claim the depreciation as a
deduction, the basis of the car is still reduced by the
amount of depreciation that could have been taken but
wasn't. See Code Sec. 1016.

Thus, when you sold the car, you would have gain for tax
purposes equal to $4,000, minus any remaining basis. In
your case, it appears that the program has been told that
the vehicle is 100% business-use, and as a result has
treated your basis as $0, resulting in a gain of $4,000,
less $0 = $4,000. See Code Sec. 1001; see also Sec. 1245
(requiring recapture of depreciation as ordinary income
rather than capital gain).

That being said, on the basis of your mileage, it appears to
be the case that 1/4 of your use was personal and thus 1/4
of your original cost basis would not be depreciable, so you
should still have a basis of at least 1/4 of the original
purchase price left in the car.

I hate to say it, but I think now would be a good time for
you to collect all of your records, your prior years' tax
returns, and get some advice from a good CPA, because using
the software program is not working out for you. Also, you
may have other expenses that are deductible that you haven't
claimed, e.g., the tolls you mention. Finally, to the
extent that you have to recognize gain on the car because of
the business-use depreciation, that part of the car should
constitute a so-called 1231 Asset, and to the extent that
the gain you recognized is not treated as ordinary income by
Sec. 1245 on account of depreciation recapture, that gain
should be a long term capital gain if the car was your only
1231 Asset, but may be an ordinary gain if you had other
1231 Assets and your 1231 losses exceeded your 1231 gains.

In addition, if you didn't claim depreciation on your prior
3 years' returns, it may be worthwhile filing amended
returns to claim that depreciation and get a refund of the
excess taxes you paid for those years (you generally cannot
go back further than 3 years, unfortunately). If nothing
else, getting a refund for your prior years will take some
of the sting out of the extra tax hit this year.

Last of all, since you have a significant stake at risk in
your business, you need to get some help setting up a basic
set of books and basic tax advice going forward so that you
don't unnecessarily increase the amount of tax you have to
pay.

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"Justin" <jwvinp[at]aol.com> wrote

- quote -

Yeah, well a portion of the standard mileage deduction is
accounting for the depreciation of the vehicle, and to tell
it like it is, any loan amount is irrelevant to the
computation of gain or loss.

I wonder though, if you are taking the standard mileage
rate, if when you told TT that you sold the car, if someone
is taking into account the cost basis (ie: what you bought
it for). Did the program at some point ask you what you
paid for the vehicle?

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

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I'm deducting mileage on form 2106. I'm a traveling music
teacher, I commute to an office and from there am sent to
various places to teach.

It is my understanding that my mileage accrued during the
work day (after arriving at the office) is deductible. I
travel 30,000 miles a year during the workday outside of my
commute to the office. This adds up to a very sizeable
deduction. I am no reimbursed for any travel expenses except
tolls.

The car I use is for both business and personal, with only
about 10,000 miles a year being for personal. I sold the car
this year and bought another car. Turbotax is taking the
$4000 I sold the car for and counting as income, which is
reducing my refund by over $600. I owed $4500 on the car
when I sold it for $4000. It is not like this money was
"profit" or "free and clear".

Form 2106 is clear cut and says "Date Vehicle Sold" and
"Sale Price". After entering these fields, Turbotax reduces
over $600 in my rebate. It never asks wether there was a car
loan?

If it matters, I do not depreciate the car as an asset. I
just take the mileage deduction each year.

Any help would be greatly appreciated, thanks.

Thanks,
Justin

<< ================================================== ===== > << The foregoing was not intended or written to be used, > << nor can it used, for the purpose of avoiding penalties > << that may be imposed upon the taxpayer. > << > << The Charter and the Guidelines for submitting posts > << to this newsgroup as well as our anti-spamming policy > << are at www.asktax.org. > << Copyright (2006) - All rights reserved. > << ================================================== ===== >