🚘 Turning Your Personal Vehicle Into a Business Asset? Here’s What to Know About Depreciation 🚘
When you convert a personal vehicle for business use, the IRS lets you start depreciating it and claim deductions. But here’s the catch:
Your depreciation basis is the lesser of:
🔹 The fair market value on the date you start using it for business, OR
🔹 Your adjusted basis (what you originally paid + improvements).
Example:
Jim bought a car for $80,000. Today it’s worth $35,000. When he switches it to business use, Jim must use the $35,000 fair market value as his depreciation basis.
👉 If you’re considering this move, plan carefully to maximize tax benefits.

Video Script
Thinking about converting your personal car into a business asset? Here’s what you need to know about depreciation. When you make the switch, the IRS allows you to start depreciating the vehicle and claiming deductions. But there’s an important rule: your depreciation basis is the lesser of two numbers. First, the fair market value of the vehicle on the day you begin business use. Or second, your adjusted basis—what you originally paid plus any improvements. Example: Jim bought his car for $80,000. Today it’s worth $35,000. When he converts it for business, his basis is $35,000, not $80,000. Plan ahead, choosing the right method can maximize your tax benefits. This has been a tax saving tip from Accounting Solutions. Book a time to learn more.

Disclaimer: This content is provided for educational purposes only and is not legal, tax, accounting, or financial advice. Every situation is unique, so consult your own attorney, CPA, or financial advisor before making decisions based on this information.