This is a hypothetical question. I read that if you are an independent contractor or otherwise incorporated, you can deduct the actual costs for driving between job sites. To maximize this, many people formally define part of their house or apartment as a Home Office.

Well, suppose one purchased an incredibly expensive vehicle, say a Dodge Viper or even a Lambourghini. If one drove the car to work, such that 90% of the miles each year on the car were spent commuting, could one deduct 90% of the immense cost of such a luxury item from taxes? Effectively buying such a toy with pre-tax dollars?


For that matter, I wonder if any of these exotic cars such as Ferraris and Bughattis exceed 6000 pounds....

The corollary questions, just to see how far you really can push the IRS.

Yachts : Buy a yacht, rent it out to be chartered. This would let you treat the cost as an expense for a business and pay for the boat with pre-tax dollars, correct?

House : set the mortgage up so that you pay interest only the first few years, which you can deduct? Then sell the house, realize tax exempt real estate capital gains, and buy an identical house down the street? This would let you gain equity in the new house without ever paying taxes on the money used to buy the equity, correct?

Airplane : same thing, a rental business would let you buy yourself such a toy with pre-tax dollars? Only paying taxes on hours you actually fly in it for pleasure as a fraction of the total?

Finally, clothes. There must be some way to deduct those expensive suits as a business expense, even though they are ordinary street attire. Perhaps if you had an expert witness consulting business or some other activity that you could honestly say you needed the priciest suits?

Zip Code: 60064

Wow, that's a lot of questions.

For the most part, any expense that qualifies as "ordinary" and "necessary" in connection with your profession is generally tax deductible. Each of the items you listed, however, has specific rules and tax court case history that should be factored in as well.

If you ever get audited by the IRS, it's up to you to substantiate the deductions you claimed.

I'd be glad to address one or two of the issues you listed in your question. Let me know.

Zip Code: 01801