Question

	Tax - Intermediate Vehicle Expense [2019] _
5	If a taxpayer wants to be able to choose between SMR and actual expenses, they must:
	A.- File an election each year with their tax return.
	B.- Choose SMR in the first year the vehicle is used for business.
	C.- Choose actual expenses in the first year the vehicle is used for business.
	D.- Choose which one they want each year.
6	Jeremy purchased and put his heavy SUV into service in May 2018. The basis of his SUV is $45,000. He would like to maximize his §179 expense. He used the SUV 80% for business. How much §179 expense deduction may he claim?
	A.- $0
	B.- $18,000
	C.- $20,000
	D.- $25,000

Answer 1

5

B.- Choose SMR in the first year the vehicle is used for business.

if the taxpayer wants to be able to choose between SMR and actual expenses then they must SMR in the 1st year they want to use the car for the business. In the later years they may then continue to use SMR or change to actual expenses. Once actual expenses are chosen then you cannot choose SMR thereafter

A.- is incorrect because election cannot be made once actual expenses is chosen

C.- is incorrect because once actual expenses is chosen, even if it is 1st year, then switch to SMR cannot be made

D.- choice can be made only when on SMR