Expert: Richard Hixenbaugh - 4/13/2010

Question
My son is doing his taxes himself this year (thanks to Turbo Tax).
He has a 1999 Hummer H-1 he purchased in 2009 (his "dream car")/
I understand that because it was a used vehicle he can't claim the $3,900.00 sales tax (we live in California).  But he had an accident in November 2009 and the vehicle was in the shop for 3 weeks.  We looked up the fair rental value and it turned out to be very significant... $2,065.00 per week.  Can he claim the loss of use for the three weeks it was in the shop (Mercury only paid for the repairs and a vehicle rental at $30.00 per day, but they paid nothing for his loss of use of his Hummer).
Please let me know and you may post the question excluding my name and my email address on any posting.
Bob
P.S. We want to get his return filed without going on an extension so I hope you have the time to get back to us.

Answer
Hi Rob,

I am not a tax accountant so I can not give tax advice. However, I would say that your son can not take the tax deduction for loss of use. The deduction you are referring to is a non-reimbursed casualty loss. Since he was provided with or paid for a rental car the claim was considered to be satisfied. Also in most cases you are only entitled to be paid for a rental car that can carry the same number of passengers. If you drive a Rolls Royce you are not entitled to rent a Rolls Royce, just a reasonable replacement vehicle that can cary 5 passengers.

Thats my take on it but you really should ask this of a CPA.

I hope this helps
Richard Hixenbaugh