Evening star., 1937-02-07

est. Deduct under interest" Qtem
8, Schedule l..
mo other deductions are allowed
to a taxpayer who uses his car for
pleasure purposes only. No allowance
is made for the amount of fines or
court costs paid for violations OF motor
laws, nor for money paid to others in
settlement of damage claims. No
credit may be taken for operating ex-
penses unless the car. is used in busi-
ness.
"Vehicles operated entirely or in
part in the business of the owner en-
title him to certain additional credits.
These deductions may be grouped un-
der one head as expenses paid
(Schedule A-3) and titled, "automo-
mobile-business use," an deducted
from the total amount of income de-
clared (Schedule A-2). If the tax
payer receives an expense account
from his employer for the use of his
car in business, the total declared in
come for the year must include this
figure.
IF the vehicle is used partly for
pleasure the taxpayer may deduct as
business use" the proper proportion
OF his total operating expense Thus.
if the car is used for business 80 per
cent of the time he may take credit
for 80 per cent of the total operating
expense for 1886. Proper items for
consideration under this head include:
"Q) Operating cost, covering (a)
full cost of fuel, (b) maintenance and
repair costs, Co garage rent, (dD in
surance premiums (net)) and (e) au-
tomobile club dues. In States where
the fuel tax may not be deducted as
a tax the price increase IS included
in the cost of fuel. As already stated.
this applies at present to both the
Federal and the Pennsylvania tax.
"(2) Depreciation is allowed on some
reasonable basis. On the theory that
the average motor vehicle has a usable
life of four years, deduction of 25
per cent of the list price is considered
reasonable for pleasure cars. Allow
ances of 10 to 80 per cent may be
accepted on trucks.
"(3) Loss in trade on a new car,
If any.
Acquiring title to a motor vehicle
by purchase, gift or inheritance does
not constitute income. But if title
is received in consideration of services
rendered, or as prize in a compe-
tition or in a lottery, it must be de-
clared under Income dtem 81.
Federal manufacturers taxes are
levied on the manufacturer and may
not be deducted by the purchaser of
a new vehicle, even though he pays
for them in the price of his car"
Production of cars and trucks for
the week ending February was down
to 70,495 units, according to an esti-
mate made by Automotive Daily News
in its mid-week digest of the industry.
This compares with a revised estimate
of 1888 for the week ending jan
uary 80.
Total January production Is esti-
mated by A. D. N. at l,559 units,
compared with 377,306 in January
1886. and 519,132 in December, 1896.
With General Motors divisions out
of the picture as far as passenger car
production Is concerned, Ford Is the
weeks largest producer, with about
10000 units, says A. D. N. Output
Of other companies, as estimated by
A. D. NJ, follow: Plymouth, 1O,500;
Dodge, 1000: Hudson and Terraplane,
1890; Packard, $500; Studebaker,
2,585; Nash and La Fayette, 1850;
De Soto, 1900; Chrysler, 1000; WHY'S.
1900; Graham, 420; Cord, 400. and
miscellaneous companies, including
truck makers, 5000.
AS February begins, Chrysler units
continue to show strength and Ford
Is holding up and showing indications
Of lifting production in the near future.
Several independent manufacturers
have been slowly increasing their out
put rates and it Is expected the trend
will continue unabated and perhaps
increased for some time, A. D. N. re-
ports.
Effect of the flood on automobile
production became noticeable this week
when one or two plants cut output
because of a pile-up of completed
units unable to be shipped to points
South. While this may temporarily
slow production in some instances,
A. D. N. points out that companies
faced with large banks of untitled
orders will probably maintain pro-
duction in the hope of cutting down
delivery DELAYS in secti0ns unaffected