Inside the IRS standard mileage rate is depreciation.
The mileage-rate depreciation might hold the key to finding secret cash. Because depreciation is separately recognized in the IRS standard mileage rate, the standard-mileage-rate vehicle has basis just like any other depreciable asset.
The sale of a depreciable business asset requires recognition of gain or loss in your tax return.
But say every time you buy a new or replacement vehicle, you trade in the old vehicle. What happens to the gain or loss?
Answer: that gain or loss moves to the replacement vehicle.
Have you been using the IRS standard mileage rates for a number of years and also been trading in those vehicles on their replacements? If so, we might find a sizable tax deduction for you.
Our records show that you use the mileage rate, but we don’t know your history of mileage rates and trades. If you have such a history, these are the tips for you so that we can see whether you might have a sizable deduction waiting for you because of your mileage-rate vehicle.