Hi,
I have been using my car for business and taking business deductions for using it the last 3 years. (I never took a business deduction for buying it as I aquired the car 9 years ago- well before I started working, and I did not take any vehicle/business deductions the year that I put in into business use in 1999). Now, midway through 2003 I moved and no longer could use a car in the city. So I cancelled the car registration/insurance, and the car is now sitting in my parent's garage. I'll use it again for business when and if I move to a city where I can have a car (maybe in 1-2years). For tax purposes, what do I do with this? Should I report that I "disposed" of the vehicle? Or that I "converted it to 100% personal use" (which is not really true as it is not being used at all right now)? Or can I just not report it as disposed at all, but continue to consider it as a business vehicle that is not accruing an expenses/ mileage right now?

Zip Code: sujatha_sing@hotmail.com

If you've been claiming your auto deduction based on the standard mileage rates, you won't need to report the fact that you took the car off the road.

If you've been basing your deduction on the actual expenses incurred, and have claimed that you used your auto more than 50% for business, and have claimed accelerated depreciation, then you will have to report that you no longer use the car more than 50% for business. If this is the case, good luck!

Zip Code: cpa@mdtaxes.com