Auto Rules 2025 - 2 CPE

Operating costs for vehicles used in the course of a taxpayer’s business are deductible. Thus, when taxpayers use their vehicles in their businesses or employment, they can deduct that portion of the cost of operating their vehicle. Such costs that can be deducted are property taxes that are paid on their vehicle if deductions are itemized on Schedule A. This mini-course reviews the apportionment of personal and business use, the actual cost method, the standard mileage method, and expensing. Moreover, this presentation informs practitioners about topics such as the benefits and costs of leasing versus owning, and working condition fringe benefits.

Completion Deadline & Exam: This course, including the examination, must be completed within one year of the date of purchase. In addition, unless otherwise indicated, no correct or incorrect feedback for any exam question will be provided.

Course Level: Overview. This program is appropriate for professionals at all organizational levels.

Field of Study: Taxes

Prerequisite: General understanding of federal income taxation.

Advanced Preparation: None

Learning Assignment & Objectives

As a result of studying the assigned materials, you should be able to meet the objectives listed below.

ASSIGNMENT

At the start of the materials, participants should identify the following topics for study:

* Apportionment of personal & business use

* Deduction limitations using the actual cost method

* Expensing - §179

* Predominate business use rule

* Auto leasing

* Standard mileage method

* Auto trade-in vs. sale

* Employer-provided automobile

* Nonpersonal use vehicle

* Reporting of an employer-provided automobile

Learning Objectives

After reading the materials, participants will be able to:

1. Recognize tax vehicle depreciation (§168) and expensing (§179) methods and their limitations under MACRS recognizing basis, business use, and deduction computations.

2. Specify the predominate business use rule recognizing the result of less than 50% qualified business use, cite the pros and cons of auto leasing, and determine how to estimate monthly lease payments indicating what factors affect payments.

3. Identify items included under the standard mileage method listing items that may be separately deducted, determine the taxable fringe benefit value of an employer-provided automobile using the general and special valuation methods and specify several qualified nonpersonal use vehicles stating what reporting standards apply.

After studying the materials, answer exam questions 1 to 10.

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