The midland journal. (Rising Sun, Md.) 1885-1947, 1938-03-11
DEDUCTIONS MOTORISTS May
CLAIM IN FILING M
COME TAX

In response to demand for specific
informauon on the character and ex-
tent OF deductions motorists may
claim In ming Federal income tax
returns, the Keystone Automobile
Club made public today a statement
covering every phase OF the problem.
The statement, prepared by Har-
rison G. Kildare, attorney for the
Club, follows:
Owners and operators of motor
vehicles may, subject to restriction
and possible review by the Collector
OF Internal Revenue, deduct take
paid, uncompensated losses to their
vehicles, interest on financed loans
and expenses incident to the actual
business use of vehicles.
specifically, full deductions
may be made tor:
"(a) REGISTRATION Fee
paid by the taxpayer. (Under Taxes
Paid, which is Item 8, Schedule +,
ON form 104OA)
"(b) OPERATORS LICENSE
paid by the taxpayer, both for him
self and members of his family IL he
foots the bill Item 81
"(c) GASOLINE AND OIL
TAXES. Deduction may be made for
State fuel taxes paid in Pennsyl-
vania, New Jersey and Maryland but
the Federal tax of cent gallon
ON gasoline cannot be credited.
"(d) LOSS BY ACCIDENT is
deductible, except when the owner
has been compensated for the loss.
Deduct under Losses" Qtem 8,
Schedule F.
"(e) INTEREST PAID ON
PERSONAL INDEBTEDNESS, in
GLIDING finance company loans. Con-
suit your finance company for the
exact rate of interest. Deduct under
Interest.
mo other deductions are allow
ed to a taxpayer who uses his car
for pleasure purposes only. No al
lowance Is made for the amount OF
fines or court costs paid for VIOLA
lions of motor laws, nor for money
paid to others in settlement of dam
age claims. No credit may be taken
for operating expenses unless the
cor 10 usod in husiness
"Vehicles operated entirely or in
part in the business of the owner
entitle him to certain additional
credits. These deductions may be
grouped under one head as eek
penses Paid" (Schedule B-3,4) and
titled, tomobile-business use".
II any income has been received
from an expense account, it should
be added to the amount Ct income
declared. schedule B-1,2)
III the vehicle is used partly for
pleasure; the taxpayer may deduct
as business use" the proportion OF
his total operating expense. Thus,
If the car is used for business 500
Of the time, he may take credit for
500 of the total operating expense
for 1897. Proper items for consid-
Grafton under this head include:
a. OPERATING COST, cover
ing (a) full cost Of fuel, CD main
tenance and repair costs, (c) garage
rent, (d) insurance premiums (net),
and (e) automobile club dues.
"(2) DEPRECITION is allow
ed on some reasonable basis. On the
theory that the average motor
vehicle has a disable life of four
years, q deduction of $50 of the
list price is considered reasonable for
pleasure cars. Allowances of ten to
thirty per cent may be accepted on
trucks.
"(s> LOSS IN TRADE ON
new car, if any.
Acquiring title to motor
vehicle by purchase, gift or inherit
ance does not constitute income.
But il title is received in considera-
ton of services rendered or as a
prize in a competition or in a lot
terry, it must be declared under
Income.
Federal manufacturers taxes
are levied on the manufacturer and
may not be deducted by the pur-
chaser Of new vehicle. even though
he pays for them in the price of his
car"