Deductions for personal car used for business ?

Edwards Finance > Personal Budget

Q. For several years I've claimed the modest use (about 5000 mi./yr. business use) of my personal car for business use (minus commuting, and employer reimbursement, etc.). Usually I'm right around the 2% floor anyway and some years below it. But, this year I've sold my car (vehicle 1) and bought a new one (vehicle 2). I notice that on Form 2106, Vehicle Expenses Worksheet, Part VI covers disposition of a vehicle. It would seem that there's a huge tax savings if I fill this section out. Should I be? Or does this not apply to me? But if it does, how do I determine the "business portion" of the sale?

A. The same way that you determined it each year, except you should use total mileage vs. total business mileage over the entire period that you owned it. However, if you really traded it in instead of sold it to someone other than the dealer/person you purchased your replacement from, see Form 8824.

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