Evening star. [volume] (Washington, D.C.) 1854-1972, 1930-01-19
AUTOMOBILE TAX
DEDUCTIONS LISTED
Motorists of Virginia, Mary
land and D. c. Soon to
File Income Returns.

With the time for filing Federal in
come tax returns rapidly approaching,
the District of Columbia Division OF
the American Automobile Association
has secured from authoritative sources
a list of the various deductions which
may or may not be made by motorists
of Virginia, Maryland and the District
when arriving at the income on which
they will be required to pay the Fed
eral tax. For convenience, they have
been divided by George E. Keneipp,
manager Of the local A. A. A. motor
club, into three groups-flrst, those
which may be deducted by all motor
are used for business or pleasure; Sec
ond, those items which may also be
deducted in the case of cars used Who'll
ly or chiefly for business; and third,
those items which are not deductible,
even though forming part Of the ex-
penSe of ownership.
First Group Credits.
In the first group, that is the items
Of expense which may be deducted by
all car owners, there are five permitted
credits which may be taken:
l. All sums paid during the calen-
ers' licenses and as District or State
personal property taxes.
2. The total sum paid as gasoline
tax where the law has been construed
to make that tax consumer tax. This
is the case In Maryland and Virginia,
and decision as to the District of Co
lumbia is now being awaited.
3. Interest on money borrowed for the
purchase Of an automobile.
TIVA
by reason Of damage to ones automo-
bile.
S. The amount of finance charges
on automobiles purchased, which COW
ers interest and risk on the loan but
not the amount covering the premium
on insurance to protect the finance
company's interest.
Second Group Credits.
In the second group, that is the items
in addition to the above which may
be deducted when the car is used
wholly or chiefly (more than SO per
cent? for business, the following credits
may be taken:
i. All operating and maintenance
expenses, including depreciation usual
~ inquired at 20 per cent per annum
of the original purchase price, on auto
mobiles used wholly for business: or
pro rata share of such expenses rep
resenting the per cent Of business use
of car used chiefly for business. In
other words, If the car in question is
used rs per cent for business, it is
permissible to deduct rs per cent of
the operating. maintenance and depre-
citation expenses.
2. Automobile insurance premiums
on automobiles used for business pur-
poses with percentage deductions per-
United where the car is used chiefly,
but not solely; for business.
8. Damages paid for injuries to per-
sons or destruction of property pro-
vided the automobile at the time of
the accident was being used for BUSH
ness.
4. Loss sustained where an auto
mobile used for business purposes is
traded for a new car.
Third Group of Items.
The third group of items. which con-
Slsts OF those expenses which NAV not
be deducted, are as follows:
l.. The amount paid for an auto
mobile, used for either business or
pleasure (this being a capital expendi-
ture and subject to claim for deprecia-
ton where the automobile is used for
business purposes).
2. Loss sustained where an auto
mobile used for pleasure is traded in
Tor a new car.