# Need Help With Taxes? Ask A Pro.



## Danger Zone (Mar 30, 2016)

I'm a former Uber driver turned tax professional. Need help with tax questions, I'll be happy to assist


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## JaxUberLyft (Jan 9, 2019)

OK...what if, because of driving in a low rate market, my UberLyft schedule C loses money year after year...doesn't the IRS eventually declare it a hobby and therefore ineligible for sch C losses?


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## Danger Zone (Mar 30, 2016)

The IRS may consider whether it is a hobby. Several factors must be taken into consideration. If it is declared a hobby, you can report zero business income, but you cannot claim the loss against other income.


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## UberTaxPro (Oct 3, 2014)

Under the new law, you cannot deduct any hobby-related expenses, but you still must report 100% of any revenue from the hobby activity as income and pay tax on it.


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## backstreets-trans (Aug 16, 2015)

I inherited my mothers house that was paid off by being listed as a death beneficiary around $300,000 value. I also sold my home of over 20 years netting over 100k and will receive a 1099 on sale. I moved into the inherited home as my only residence. What kind of taxes do you think I'm looking at. Plus Uber income.


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## JaxUberLyft (Jan 9, 2019)

backstreets-trans said:


> I inherited my mothers house that was paid off by being listed as a death beneficiary around $300,000 value. I also sold my home of over 20 years netting over 100k and will receive a 1099 on sale. I moved into the inherited home as my only residence. What kind of taxes do you think I'm looking at. Plus Uber income.


Well, not to horn in on the tax pros, but both house gains might be excluded by the floor on inheritance tax and exclusion on sale of primary home.


The hobby issue could be a real problem for drivers in markets where mile and minute rates don't exceed the standard mileage deduction.

I surfed up the nine factors distinguishing a hobby from a business - business-like manner, accurate recordkeeping,time and effort intended to become profitable, dependence upon biz income, circumstances of losses, changes to become profitable, knowledge, prior success, previous years outcomes, appreciation of business assets.

Looks to me that for the most part if a LyftUber driver keeps good records and makes good faith effort to become profitable, he / she should be able to satisfy enough of the nine tests to steer clear of hobby designation.

The folks that ride around with a rideshare app online in the course of daily commute and other personal mileage but rarely actually accept pings would seem in danger of running afoul of the hobby tests.


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## WNYuber (Oct 5, 2019)

1st year driver here, been driving for 6 months. I'll round all my digits for simplicity, if you can tell me what to claim here.
Gross earnings: 7,000
Expenses, Fees, Tax: 2,500
Net Payout: 4,500
Online miles: 5,800
I would just use the standard deduction of .58 per mile so that would equal 3,364. My only other expense would be a dash cam for $200.

Can you just brief me on how to do these taxes, like I said....I'm a 1st year part timer that has done this for 6 months. I did not see any yearly tax summary beyond my monthly ones. Street word is I won't get a 1099 or a yearly summary, so all my figures I just added up off the monthly statements. 

Thanks!


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## Danger Zone (Mar 30, 2016)

UberTaxPro said:


> Under the new law, you cannot deduct any hobby-related expenses, but you still must report 100% of any revenue from the hobby activity as income and pay tax on it.


In response to UberTaxPro, he is correct. The new tax law does not allow for hobby expense. Instructions seem to contradict. In some places, it explicitly states that hobby expenses are no longer deductible. In other places, it indicate they are deductible up to the amount of profit earned. In any event, it doesn't matter, as there is no place on the tax forms to report a hobby expense.



JaxUberLyft said:


> OK...what if, because of driving in a low rate market, my UberLyft schedule C loses money year after year...doesn't the IRS eventually declare it a hobby and therefore ineligible for sch C losses?


You can no longer claim hobby expenses. See UberTaxPro entry. Hopefully, that does not become an issue for you. Furthermore, it may not be an issue at all. The new, increased, standard deduction should be more than enough to offset any loss you may have incurred with Uber.


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## FLKeys (Dec 27, 2018)

You can have continued losses and not be considered a hobby. There are multiple requirements. Has anyone heard of a test case when it comes to Rideshare/Hobby?

Question
How do you distinguish between a business and a hobby?
Answer
In making the distinction between a hobby or business activity, take into account all facts and circumstances with respect to the activity. A hobby activity is done mainly for recreation or pleasure. No one factor alone is decisive. You must generally consider these factors in determining whether an activity is a business engaged in making a profit:

Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records.
Whether the time and effort you put into the activity indicate you intend to make it profitable.
Whether you depend on income from the activity for your livelihood.
Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business).
Whether you change your methods of operation in an attempt to improve profitability.
Whether you or your advisors have the knowledge needed to carry on the activity as a successful business.
Whether you were successful in making a profit in similar activities in the past.
Whether the activity makes a profit in some years and how much profit it makes.
Whether you can expect to make a future profit from the appreciation of the assets used in the activity.
You may find more information on this topic in section 1.183-2 (b) of the Federal Tax Regulations.


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## Danger Zone (Mar 30, 2016)

WNYuber said:


> 1st year driver here, been driving for 6 months. I'll round all my digits for simplicity, if you can tell me what to claim here.
> Gross earnings: 7,000
> Expenses, Fees, Tax: 2,500
> Net Payout: 4,500
> ...


You should get a 1099 MISC form. If you earn over $600, you should get one. However, if you do not receive one, you can use those monthly statements for income verification. To do you taxes, you will need a 1040 and a schedule C. You may need additional forms, depending upon what your total situation is and what you are trying to do, i.e., do you have a mortgage? Are you claiming vehicle depreciation? Do you work another job? Do you support a family? Depending upon your situation, you may want to explore these other possibilities. On the other hand, it may not matter that you do?

This may sound complicated, but it may not be. There is free software that guides you through the tax preparation process. You can contact the IRS to find out where to find it. If you are not comfortable with doing it yourself, you can always have someone like me do it for you, for a price. If you'd be interested in exploring my online tax service, just let me know.


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## FLKeys (Dec 27, 2018)

Whether you carry on the activity in a businesslike manner and maintain complete and accurate books and records. I keep mileage logs and trip logs including records of every trip. You know like a sales record and expense record. Complete and accurate books and records.
Whether the time and effort you put into the activity indicate you intend to make it profitable. I analysis my past records to key in on better spots. I place myself in these better spots. I minimize unpaid miles trying to increase my profits.
Whether you depend on income from the activity for your livelihood. I depend on the non-taxable income generated from rideshare.
Whether your losses are due to circumstances beyond your control (or are normal in the startup phase of your type of business). The standard mileage deduction is beyond your control. Uber fees are beyond your control. Rates charged are beyond your control.
Whether you change your methods of operation in an attempt to improve profitability. Decreasing unpaid miles, investigating new areas and time frames.
Whether you or your advisors have the knowledge needed to carry on the activity as a successful business. HA! HA! 
Whether you were successful in making a profit in similar activities in the past. Does this apply??
Whether the activity makes a profit in some years and how much profit it makes. May apply if you relocate to a better paying market.
Whether you can expect to make a future profit from the appreciation of the assets used in the activity. Forget this one.


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## LADryver (Jun 6, 2017)

Danger Zone said:


> The IRS may consider whether it is a hobby. Several factors must be taken into consideration. If it is declared a hobby, you can report zero business income, but you cannot claim the loss against other income.


All income from hobbies is includable in Gross Income.



backstreets-trans said:


> I inherited my mothers house that was paid off by being listed as a death beneficiary around $300,000 value. I also sold my home of over 20 years netting over 100k and will receive a 1099 on sale. I moved into the inherited home as my only residence. What kind of taxes do you think I'm looking at. Plus Uber income.


You should be certain that the value of the house be reflected accurately on the probate documents for the transfer. You will not be taxed on the inheritance. Only an Estate is taxed above certain numbers of millions of dollars, but you will not be taxed on the house value. Inheritance is not taxable. The value at inheritance will be your basis when you sell it, and will establish profit or loss.

Your previous house had a purchase price. You need to determine your profit and it may be excluded.

Uber income is complicated at the present time but if it was the only business use of your car it can be simpler. Use an experienced non-franchised tax professional or maybe a senior staff level in Jackson Hewitt.


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## JaxUberLyft (Jan 9, 2019)

WNYuber said:


> 1st year driver here, been driving for 6 months. I'll round all my digits for simplicity, if you can tell me what to claim here.
> Gross earnings: 7,000
> Expenses, Fees, Tax: 2,500
> Net Payout: 4,500
> ...


Other expenses might include a portion of you phone and data plan, any candy, charge cords, bottled water you provide as an amenity, cleaning supplies. Also consider small tools such as smart phone bracket.

I pay AT&T / Onstar for my car to have a hot spot so as not to eat all our family data plan. I consider that a biz expense since I would not buy it if I didn't Lyftuber.


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## LADryver (Jun 6, 2017)

JaxUberLyft said:


> Other expenses might include a portion of you phone and data plan, any candy, charge cords, bottled water you provide as an amenity, cleaning supplies. Also consider small tools such as smart phone bracket.
> 
> I pay AT&T / Onstar for my car to have a hot spot so as not to eat all our family data plan. I consider that a biz expense since I would not buy it if I didn't Lyftuber.


When you take an expense you have to pass two seperate tests. One, is whether the expense is ordinary for your business. Two, is whether the expense is necessary for your business.

I could envision your choice of avoiding unlimited data plans as a method to bring the deduction of the vehicle device. If I were the examiner I would disallow it and if I were the preparer I would not deduct it. You have a lot of good reason to have On Star regardless. It is not ordinary for your business. It does not pose a necessity outside of your own decision. It could help in an emergency. But you should also have an unlimited data plan or compute your data needs and purchase accordingly. On the other hand if you have unlimited data and had to have the safety device so that you could feel safe while doing the business, I might accept that deduction. Because in that way it is an ordinary emergency solution and a necessity to perform your work. Get an unlimited data plan.



Danger Zone said:


> I'm a former Uber driver turned tax professional. Need help with tax questions, I'll be happy to assist


It is good you know Uber but you know very little about taxes but keep up your learning. Dont hurt innocent taxpayers. Steer them to local free assistance if need be. Volunteer with the tax assistance program in your area where they will further your training.


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## Older Chauffeur (Oct 16, 2014)

LADryver said:


> It is good you know Uber but you know very little about taxes but keep up your learning.


Okay, so this poster says he/she is a tax professional. So I'm curious- how do YOU know, based on this thread, how much this poster knows?


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## LADryver (Jun 6, 2017)

Older Chauffeur said:


> Okay, so this poster says he/she is a tax professional. So I'm curious- how do YOU know, based on this thread, how much this poster knows?


By the way he is responding. He also said he just learned taxes. Only a non-pro would be confused about how much he knows. It is easy to "learn taxes" but it takes a lot more to know them. If he is employed by a tax firm he would get a better education even still. If he just took a course and knows more than john doe, then it is a high to "know taxes" but honestly, it is a short shrift to applied professionals.


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## Older Chauffeur (Oct 16, 2014)

Wher


LADryver said:


> By the way he is responding. He also said he just learned taxes. Only a non-pro would be confused about how much he knows. It is easy to "learn taxes" but it takes a lot more to know them. If he is employed by a tax firn he would get a better education even still. If he just took a course and knows more than john doe, then it is a high to "know taxes" but honestly, it is a short shrift to applied professionals.


Where does he say he just learned taxes?


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## LADryver (Jun 6, 2017)

Older Chauffeur said:


> Wher
> 
> Where does he say he just learned taxes?


Because he just joined and said he is a former Uber driver, and that wouldn't be more than four years ago, and "turned tax professional" which happened when he was hired after taking someone's tax course more recently than that. He wasnt a tax pro turned Uber driver. Thousands take tax courses every year and take jobs with large ir small tax prep firms. H&R, Liberty, Hewitt, and many more. Even if he was trained like I had my first training, he would have more to learn. But he couldnt call himself a pro legally if he did.

On a hobby expense, he said "Instructions seem to contradict. In some places, it explicitly states that hobby expenses are no longer deductible. In other places, it indicate they are deductible up to the amount of profit earned. In any event, it doesn't matter, as there is no place on the tax forms to report a hobby expense."

However in 2018, when hobby expenses were deductible up to 2% of income, he may not had taken the course yet. It would not had been taught in 2019. And so he did not know it was ever a Schedule A item.

My original training included the current year and two prior years all in the same class. It was eighty hours in two weeks. And there were other things too like how to prevent audits and collection actions and such.


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## Danger Zone (Mar 30, 2016)

I've been doing taxes as a W2 employee or independent contractor/self employed for over forty years, and during that time, I never had a return rejected, and there was always something new to learn just about each year. Just like now. The laws change all the time. Yes, it is recent that I joined a tax company, and believe me, every return that I do will be checked over by folks who are much more savvy than I am. I went through a training with this company, and have a pretty good grip on the most common stuff. If I have doubts, I will do what any prudent person will do, and that is don't give an answer, or go find the answer.


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## UberTaxPro (Oct 3, 2014)

Danger Zone said:


> you can always have someone like me do it for you, for a price. If you'd be interested in exploring my online tax service, just let me know.


FYI - the powers that be on this board have not allowed solicitations in posts


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## LADryver (Jun 6, 2017)

Danger Zone said:


> I've been doing taxes as a W2 employee or independent contractor/self employed for over forty years, and during that time, I never had a return rejected, and there was always something new to learn just about each year. Just like now. The laws change all the time. Yes, it is recent that I joined a tax company, and believe me, every return that I do will be checked over by folks who are much more savvy than I am. I went through a training with this company, and have a pretty good grip on the most common stuff. If I have doubts, I will do what any prudent person will do, and that is don't give an answer, or go find the answer.


You should know better than to give unreviewed opinions online.


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## WAHN (May 6, 2019)

Older Chauffeur said:


> So I'm curious- how do YOU know, based on this thread, how much this poster knows?


When it comes to taxes for Uber/Lyft, the following is already strike one. 



Danger Zone said:


> You should get a 1099 MISC form. If you earn over $600, you should get one.


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## Older Chauffeur (Oct 16, 2014)

WAHN said:


> When it comes to taxes for Uber/Lyft, the following is already strike one. :wink:


Yeah, I caught that, but was lazy and let it slide. :laugh:


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## WAHN (May 6, 2019)

Older Chauffeur said:


> Yeah, I caught that, but was lazy and let it slide. :laugh:


I do mostly delivery with DD, so I didn't earn enough to get the 1099K, but at least I was aware of it.

We'll call it a "teachable moment".

Keep learning OP. You'll get there. :thumbup:


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## Jon Stoppable (Dec 11, 2019)

If I own a house in Costa Rica via a local corporation (required under CR law), and I rent it out, is my net profit considered subpart F income?


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## LADryver (Jun 6, 2017)

Jon Stoppable said:


> If I own a house in Costa Rica via a local corporation (required under CR law), and I rent it out, is my net profit considered subpart F income?


Call the IRS and ask for a Foreign Corporation Tax Specialist. They will provide you with your answer.


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## UberTaxPro (Oct 3, 2014)

Jon Stoppable said:


> If I own a house in Costa Rica via a local corporation (required under CR law), and I rent it out, is my net profit considered subpart F income?


Probably, if the following are true:
1. The U.S. person must be a U.S. shareholder as defined in IRC 951(b).
2. The foreign corporation must be a CFC as defined in IRC 957(a). 
3. The CFC must have FPHCI.

CFC = controlled foreign corporation
FPHCI = foreign personal holding company income IRC 954(c)

This is a complicated area and this is meant only to give you someplace to start researching on your own if you desire. I would recommend consulting with an Enrolled Agent.


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## LADryver (Jun 6, 2017)

UberTaxPro said:


> Probably, if the following are true:
> 1. The U.S. person must be a U.S. shareholder as defined in IRC 951(b).
> 2. The foreign corporation must be a CFC as defined in IRC 957(a).
> 3. The CFC must have FPHCI.
> ...


Or you can ask a Foreign Corporation Tax Specialist in the IRS. For free.


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## Jon Stoppable (Dec 11, 2019)

If it's taxable, can it offset passive losses from US rental properties?


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## UberTaxPro (Oct 3, 2014)

Jon Stoppable said:


> If it's taxable, can it offset passive losses from US rental properties?


I'm gonna leave that to @Danger Zone for now, it's his/hers post! Or @LADryver, he claims to have worked for the IRS


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## JaxUberLyft (Jan 9, 2019)

LADryver said:


> When you take an expense you have to pass two seperate tests. One, is whether the expense is ordinary for your business. Two, is whether the expense is necessary for your business.
> 
> I could envision your choice of avoiding unlimited data plans as a method to bring the deduction of the vehicle device. If I were the examiner I would disallow it and if I were the preparer I would not deduct it. You have a lot of good reason to have On Star regardless. It is not ordinary for your business. It does not pose a necessity outside of your own decision. It could help in an emergency. But you should also have an unlimited data plan or compute your data needs and purchase accordingly. On the other hand if you have unlimited data and had to have the safety device so that you could feel safe while doing the business, I might accept that deduction. Because in that way it is an ordinary emergency solution and a necessity to perform your work. Get an unlimited data plan.


I don't have the safety elements of Onstar, just the data. Cost of going from what we have to an unlimited plan exceeds cost of the Onstar data. The in-car hot spot of the Onstar data plan provides a rider amenity conducive to increased tips.

Running LyftUber apps gobbles data so data expense is ordinary and necessary.

All that said, I won't let fear of a minor deduction being disallowed in the extremely unlikely event of an audit govern how I run the business or compile expenses.

Besides that, the facts that I have carefully considered these issues lends support to elements of the nine part tests that support that this is a business, not a hobby.


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## LADryver (Jun 6, 2017)

JaxUberLyft said:


> I don't have the safety elements of Onstar, just the data. Cost of going from what we have to an unlimited plan exceeds cost of the Onstar data. The in-car hot spot of the Onstar data plan provides a rider amenity conducive to increased tips.
> 
> Running LyftUber apps gobbles data so data expense is ordinary and necessary.
> 
> ...


It isn't about HOBBY. The point I was making concerned how you explain your reasons for it. It's a flick of the wrist.


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## Rob-DE (Jul 15, 2017)

On my regular job paychecks they hold back money for Medicare and social security. As uber drivers, do we have to pay a portion of what we make to these two pots? If so how does that work?


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## Older Chauffeur (Oct 16, 2014)

Rob-DE said:


> On my regular job paychecks they hold back money for Medicare and social security. As uber drivers, do we have to pay a portion of what we make to these two pots? If so how does that work?


There's a Schedule SE on which you will figure your SECA (Social Security and Medicare contributions) amounts on your net profit from Schedule C business income and expenses. It's the same 15.3% as you and an employer would pay together through withholding on a regular job. In the case of self employment there is a threshold of $400 in profit- if your net profit is below that you won't pay SECA. In you owe SECA, you will pay it with any income taxes you owe when you file your return.


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## Seamus (Jun 21, 2018)

WAHN said:


> I do mostly delivery with DD, so I didn't earn enough to get the 1099K, but at least I was aware of it.
> 
> We'll call it a "teachable moment".
> 
> Keep learning OP. You'll get there. :thumbup:


Well.....just to complicate things not all the apps are consistent. Some do it differently. While Uber and Lyft consider themselves "payment processors" subject to 1099*K *rules, others do not. With DoorDash they are totally different from Uber and Lyft in that you will actually get a 1099 *misc *over $600. 

It's becoming more common for drivers to do several different platforms, and it kind of complicates things a little bit that they aren't consistent in how they issue 1099's.

With DD, they should have sent you an email to join "payables.com" who does their 1099 misc forms. If you join online you will have your 1099 misc emailed to you by 1/31. If you didn't join you will get one mailed to you 1/31.


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## WAHN (May 6, 2019)

Seamus said:


> Well.....just to complicate things not all the apps are consistent. Some do it differently. While Uber and Lyft consider themselves "payment processors" subject to 1099*K *rules, others do not. With DoorDash they are totally different from Uber and Lyft in that you will actually get a 1099 *misc *over $600.
> 
> It's becoming more common for drivers to do several different platforms, and it kind of complicates things a little bit that they aren't consistent in how they issue 1099's.
> 
> With DD, they should have sent you an email to join "payables.com" who does their 1099 misc forms. If you join online you will have your 1099 misc emailed to you by 1/31. If you didn't join you will get one mailed to you 1/31.


Yep.

I had income from Lyft, Uber, Grubhub, DoorDash, and Postmates(well $9.20 :roflmao: )

Throw in a little from Amazon and Adsense and I'll be agitated when filing.


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## LordBinky (Dec 11, 2019)

Okay, I'll be using standard mileage on my return, but what else can I claim as a deduction on top of that? Thanks.


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## LADryver (Jun 6, 2017)

Rob-DE said:


> On my regular job paychecks they hold back money for Medicare and social security. As uber drivers, do we have to pay a portion of what we make to these two pots? If so how does that work?


It is called a Schedule SE, Self Employment Tax. It goes on your 1040.


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## ChicagoJoe (Dec 19, 2017)

Danger Zone said:


> I'm a former Uber driver turned tax professional. Need help with tax questions, I'll be happy to assist


I got into an accident with only myself in the vehicle. The accident occurred on personal travel. However, this was the vehicle I used to drive with Uber. Unfortunately, the car was totaled. Insurance cut me a check for the current value of the car and I used that check towards the purchase of my current vehicle.

When filling, how would I go about reporting this? Do I report this as a sale, and use the insurance check amount as my sale price? How do I account for depreciation? And what is AMT depreciation?

Thanks in advance!


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## LADryver (Jun 6, 2017)

ChicagoJoe said:


> I got into an accident with only myself in the vehicle. The accident occurred on personal travel. However, this was the vehicle I used to drive with Uber. Unfortunately, the car was totaled. Insurance cut me a check for the current value of the car and I used that check towards the purchase of my current vehicle.
> 
> When filling, how would I go about reporting this? Do I report this as a sale, and use the insurance check amount as my sale price? How do I account for depreciation? And what is AMT depreciation?
> 
> Thanks in advance!


Im butting in a bit here. I am retired from tax practice but had ten years including two within the IRS. AMT is a concern only if you have such high ratios of write-offs and high incomes being offset, that you face Alternative Minimim Tax computations, one of which being Depreciation. What you do have to be concerned about is triple-fold. The car you used for business had a business use percentage whether you used mileage or actual costs. You seem like you may have used actual expenses because the depreciation allowed was too good to pass up. The same percentage you used to write off, you will have to use to repay excess depreciation taken, called Recapture of Depreciation. Do not do this by yourself. A good tax person face to face could do this in their sleep. Find a good one and give them a chance, figure an hour to two hours, to get this all worked out.


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## mbd (Aug 27, 2018)

Why do you need help with TEXAS?🤔


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