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🚘 Turning Your Personal Vehicle Into a Business Asset? Here’s What to Know About Depreciation 🚘

🚘 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.