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This is a tax question I was in a car crash and totaled my

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This is a tax question...
This is a tax question: I was in a car crash and totaled my car. It was used for both business (25%) and personal use(75%). As a casualty loss, do I claim as business or personal?
Submitted: 8 years ago.Category: Tax
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1/2/2009
Tax Professional: RD, Certified Public Accountant (CPA) replied 8 years ago
RD
RD, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 8,784
Experience: CPA, MBA, Over 10 yrs of experience in tax planning and business consulting..
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Did you get any insurance reimbursement on this?

 

Did you claim any depreciation on this vehicle? or you claimed mileage?

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Customer reply replied 8 years ago

Yes, the car was covered by insurance for the outstanding loan amount.

I claimed mileage for this tax year. As this relates, do I claim that I disposed of this vehicle too, or does the casualty loss address the vehicle disposition?

Tax Professional: RD, Certified Public Accountant (CPA) replied 8 years ago

You claimed mileage on this vehicle and hence, this is not going to be a business loss.

 

Casualty loss deduction is determined the amount of your casualty or theft loss.

It is the lesser of the adjusted basis of your property, or the decrease in fair market value of your property as a result of the casualty or theft. Casualty loss will include situation where the asset is totally destroyed or disposed off.

 

Any reimbursement you receive from the insurance will reduce the loss. Here is a link to the publication that will provide you the detailed information-

 

http://www.irs.gov/publications/p584/ar02.html#d0e126

 

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

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Customer reply replied 8 years ago
Sounds good about claiming this as personal. My related question is what do I do about marking the vehicle as dispose of-- vehice disposition? Do I need to do this as well - i.e. note the casualty date AND the vehcile disposition date, even though the car was not sold?
Tax Professional: RD, Certified Public Accountant (CPA) replied 8 years ago
Did you report this as a asset on your business schedule- Form 4562?
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Customer reply replied 8 years ago
No, I did not
Tax Professional: RD, Certified Public Accountant (CPA) replied 8 years ago

You do not have to report the vehicle disposition. You will fill in Form 4684 to report the casualty loss.

 

 

Let me know if you have any question.

 

Please note: This advice is provided with the understanding that all the relevant facts have been provided by you. Any change in facts might affect the advice given and hence may not be relied on in such cases. Nothing contained in this reply was intended or written to be used, can be used by any taxpayer, or may be relied upon or used by any taxpayer for the purposes of avoiding penalties that may be imposed on the taxpayer under the Internal Revenue Code of 1986, as amended.

RD
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