Perry H. Kay, Sr. - Page 9

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          1998.  However, petitioner presented an invoice at trial for the            
          purchase of the van dated March 6, 1997.  Further, petitioner               
          testified that the van was driven for personal use “part of the             
          time.”  Therefore, the only evidence presented on this point                
          indicates that the van was first placed in service in a personal            
          activity in 1997.  The section 179 expense is allowed as a                  
          deduction only in the year the property is placed in service.               
          See sec. 179(a); Hendrix v. Commissioner, T.C. Memo. 1990-221;              
          sec. 1.179-4(e), Income Tax Regs.  Accordingly, petitioner is not           
          entitled to the section 179 expense deduction claimed on the van            
          in 1998.                                                                    
                    ii.  Business Standard Mileage Rate Expense                       
               Since we found above that petitioner is not entitled to a              
          section 179 expense deduction, petitioner may use the standard              
          mileage rate to calculate the business-related vehicle expenses             
          on the van, if substantiated.                                               
               The business standard mileage rate in lieu of operating and            
          fixed costs allows the taxpayer to deduct an amount determined by           
          multiplying the business standard mileage rate for the year at              
          issue by the number of miles driven for business purposes.  Rev.            
          Proc. 97-58, 1997-2 C.B. 587.  The standard mileage rate for 1998           
          was 32.5 cents per mile.  Id.                                               
               Petitioner reported 12,370 miles driven for business                   
          purposes on Schedule C for the year at issue.  Petitioner claimed           

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