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PriorityMotif@lemmy.world ⁨7⁩ ⁨months⁩ ago

You can only deduct the full purchase of a capital expense such as a car in certain situations. Usually you have to amortize/depreciate the expense over a set amount of time. I’m not sure if you can still claim milage as an expense if you claim the vehicle as an expense.

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scarabic@lemmy.world ⁨7⁩ ⁨months⁩ ago
I think it was just offered as an illustration of the concept, not as tax advice.

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eRac@lemmings.world ⁨7⁩ ⁨months⁩ ago
My understanding is that amortization is the confusing part of the situation OP is asking about. When you have an asset, the cost of it is deducted from income over the useful life. By declaring that it will never be released, the useful life is reduced to zero, allowing them to take the whole tax deduction at once.

They still would have been better off never spending the money. Since they already have, if they have so little cash that they can’t afford their tax bill, it might make sense to throw away future income to stay afloat now.

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