Discussion:Domestic Partner Owns Car - Take Standard Mileage?

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Discussion Forum Index --> Basic Tax Questions --> Domestic Partner Owns Car - Take Standard Mileage?


Discussion Forum Index --> Tax Questions --> Domestic Partner Owns Car - Take Standard Mileage?

Cobbcpa (talk|edits) said:

6 August 2009
My client, Sue, is a partner is a same sex domestic relationship. See and her partner have lived together for several years and share all costs. Because of Sue's credit history, her domestic partner bought Sue's car. Sue uses the car for her sole proprietorship business. Because the business involves traveling to customer sites, she has high mileage.

Sue's name is not on the title and the loan is not in her name. Her name is on the joint insurance policy and the service records are in her name alone. She gives money to her partner to make the car payments.

Because Sue thought she could take standard mileage, she didn't keep gas and service receipts.

I remember reading that you can't take standard mileage if you don't own the car, but think it might be different in a live-in relationship. Haven't been able to find the earlier series of posts about this issue.

Can Sue legitimately take standard mileage?

Thanks -

CrowJD (talk|edits) said:

6 August 2009
Go ahead and incorporate the car, and let Sue buy shares in it. You can probably discount them pretty good because it's a thin market (you can probably get it listed on the Lithonia or Lithia Springs Stock Exhange). This will put everything on the QT.

Yes, it's true that a live-in relationship is an exception, the only problem is that they are required to live in the car.

P.S. Part of the standard mileage rate accounts for depreciation, and I don't see what Sue owns in order to take this "depreciation". Then too, she doesn't really have an auto expense, as I read this. On the other hand, I understand that she is contributing to the overall well-being of the household by earning the income.

Taxteck2 (talk|edits) said:

6 August 2009
Cobbcpa, it appears that Sue is the owner of the care -- even though she is not the legal or registered owner.

Cobbcpa (talk|edits) said:

6 August 2009
While I was working away trying to figure out how get listed on the Lithia Springs Stock Exchange, which is housed right by the Lithonia barber shop and conveniently near to the Lithonia Dunkin Donut, my client called the IRS on her own.

The IRS rep with whom she spoke told her that there is nothing in the law that requires a person to own a car in order to take standard mileage on it. And he also told her she has a good enough case to deduct the standard mileage. He also checked with his IRS supervisor, who agreed.

I told her we can't rely on an IRS phone call, but like the answer. I thought there was something in the law about this, though.

CrowJD (talk|edits) said:

6 August 2009
Well, I guess I did hit that one in the rough. It's good to know that some stories do end up with a happy ending.

Taxteck2 (talk|edits) said:

6 August 2009
Unwritten advice from the Internal Revenue Service is not worth the paper it’s written on.

The standard mileage rate can be used only by the owner or lessee of the automobile. Rev. Proc. 2008-72, Sec. 5.02.

As I indicated previously, your client appears to be the equitable owner of the automobile, although not listed as the legal or registered owner.

Cobbcpa (talk|edits) said:

6 August 2009
Thanks so much for the answers and for the Rev. Proc. number.

Kevinh5 (talk|edits) said:

6 August 2009
if you dip the donut in the actual lithia springs (for which the city was named) before eating them, you will have a more peaceful and enlightening day. With or without Lithonia Lighting. I bought my chandelier from Marietta Lighting anyways. Cheaper and more selection than Lithonia Lighting.

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