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587. However, the business standard mileage rate may not be used
to compute deductible expenses if the taxpayer has claimed a
section 179 expense deduction on the same vehicle. Rev. Proc.
97-58, 1997-2 C.B. 587. Thus, petitioner may not claim
deductions on the van for both the section 179 expense and the
standard mileage rate. Assuming petitioner could substantiate
entitlement to a deduction for both expenses, petitioner would be
limited to either the section 179 expense deduction or the
standard mileage rate deduction, but not both.
i. Section 179 Expense
Petitioner claimed a section 179 expense deduction of $7,000
on Schedule C for the year at issue. For the 1998 taxable year,
section 179 allows a taxpayer to elect to expense, as a deduction
for the year in which the property was placed in service, up to
$18,500 of the cost of certain property acquired for use in the
active conduct of a trade or business. Sec. 179(a), (b), (d).
“The term ‘placed in service’ means the time that property is
first placed by the taxpayer in a condition or state of readiness
and availability for a specifically assigned function, whether
for use in a trade or business, for the production of income, in
a tax-exempt activity, or in a personal activity.” Sec. 1.179-
4(e), Income Tax Regs.
Petitioner claimed on Form 4562, Depreciation and
Amortization, that the van was placed in service on January 1,
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Last modified: May 25, 2011