After that, we leave him to the world of stretchable hose and non-stretchable budgets. The planner is most concerned with four stages of the shopper's trip — the road he travels to get to the center,the point at which he leaves this road and enters the center, the search for an unoccupied parking space, and the walk to the stores. Shopping center developers, as shown in the earlier reports, must consider many facts which are not strictly within city planning jurisdiction, such as the trade potential of the area surrounding the shopping center, and the types of stores that should be located in a particular shopping center.
As final plans for the shopping center begin to emerge, showing the size and layout of the stores, parking area, and service areas, the planner becomes vitally concerned. In fact, we believe there is enough information available on the principles and practices of shopping center development for the planner to be concerned about possible zone locations for shopping centers even before a shopping center is proposed for his area.
This report tries, therefore, to cover the stages of the shopper's progress that concern the planner and indicate the difficulties encountered along the way. Thirty minutes driving time is currently the accepted limit of the market area of a major regional shopping center, which might serve up to , people. The area enclosed within the thirty-minute driving time has to be calculated according to the condition and congestion of the streets and is not always in direct ratio to linear distance.
Five miles of expressway may be traversed more quickly than five blocks of crowded business section. Shopping center developers recommend traffic counts of the major streets serving the center, not so much as an indication of the business potentiality, but as a check on the congestion already existing and an aid in predicting the traffic situation after the center is opened. As a matter of self-preservation, developers and architects recommend further studies, including the future road-construction programs in the area, and future housing developments and population movements in the area, so that other effects on business and traffic may be determined.
Once the gross annual volume of business of the center has been estimated, the average number of cars using the center daily may be estimated. Also the peak traffic, in and out, may be estimated, and the time of day at which peak loads will occur may be determined see below: Stage Two. To the normal present and future traffic loads of the roads serving the center must be added the traffic generated by the center, and the totals must be compared with the capacity of the roads.
If the roads do not have the extra capacity to handle the future traffic loads, new road construction should be in the offing, or the center should be located elsewhere. If possible, the site selected for a new shopping center should be adequately serviced by existing public roads. Crowded highway intersections have long been considered good commercial locations, but the problem of access to the shopping development is receiving much fuller consideration in modern shopping center planning.
The key to the access problem is not the volume of traffic passing the center, but the density. As traffic surveys have often shown, the total number of cars passing a given point on a road the volume eventually drops as the density gets close to the saturation point.
The reason for this relationship is simple. The closer the cars are packed together, the slower they must go. In such dense traffic, as might be said to characterize the rush hour traffic of some Los Angeles freeways or the Chicago Outer Drive, tie-ups and delays are also more frequent, and more costly in terms of highway efficiency. The roads having highest volumes are those on which the cars are spaced further apart and travel at higher speeds with relative safety.
Both the high-density and high-volume roads offer problems of access to the shopping center. On the high-density, fairly slow-moving road, it will be difficult for drivers to maneuver into position to turn off. On high speed roads, ample warning must be given the driver that he is approaching an exit, and the exits into the center must be designed with safety features that take the higher speeds into account.
Few shopping centers will be served by high-speed, limited-access roads. Shopping centers being constructed in developing areas will be served by an existing road network which may not be adequate to handle the traffic that will arise when the shopping center is completed and the area is built-up. The points of access from the roads to the shopping center should be adequate to accommodate traffic at the busiest hours of the center.
Victor Gruen, architect and designer of shopping centers in "Traffic Impact of the Regional Shopping Center," see biblio estimates that an exit or entrance with continuous flow can handle up to cars per hour. The peak load of a shopping center can be estimated on the basis of the annual gross income of the center.
The problem is three-fold: first, to determine the largest single-day gross business; second, on the basis of the average purchase per car to determine how many cars will be in and out of the center on that day; and third, to estimate the number of cars that will enter and leave the center during the busiest hours of that day.
Gruen estimates that a large regional shopping center may expect a peak volume at the rate of 3, cars per hour. In such a case, it would seem that four exits are needed to discharge the 3, vehicles.
Parking is the prime convenience advantage of the shopping center over the central business district. In spite of the repetitive statement of this fact, the shopper may not always find the parking space he wants.
The shopper wants a space he can find easily, with a minimum of difficulty in moving around the parking area, and one that is located near the store or store group in which he is going to shop. The fault is sometimes with the developers who have underestimated the need for parking space or found the land too valuable to be devoted to parking.
Sometimes there are too few parking spaces simply because there are too many people with cars looking for them. Leaving the center, he must go through approximately the same steps in reverse, including finding his car which occasionally seems more difficult than it was to find the space originally. Finding the space. Whether the customer finds a space at all depends on the amount of parking space originally provided. The quantity of space is discussed below.
Otherwise, the key factors in moving cars around the parkinglot are the lay-out and width of the aisles between the rows of parked cars, especially near the most attractive stores, the department store s , the supermarket s , and the drug store s. How wide the aisles should be depends mostly on whether they will be one-way or two-way. A survey made by the Eno Foundation Parking Lot Operation , showed that the aisle widths of eight parking lots with one-way aisles averaged 14 feet, and ranged from 7.
The low figure of 7. For two-way aisles, the width in about twenty parking lots averaged If the customers park their own cars, as happens at nearly all shopping centers, then the aisles should not be so narrow as to make the task difficult, nor so narrow that one car being parked will temporarily tie up traffic in the aisle. For one way aisles, width should be at least 10 feet; for two way aisles, about 20 feet. Getting the car into the space: Basically, we are assuming that most parking lots are laid out pretty much in the same way.
For instance, the spaces and the aisles may be laid out this way:. The narrower aisles a are the pedestrian walkways sometimes provided, and the wider aisle b between rows of spaces is the aisle for maneuvering the cars. The lay-out may be varied for several types of angle parking, thus:. The total parking lot area per car space including aisles affects the customer in terms of his difficulty or lack of difficulty in getting into a parking space.
The Eno study showed that, for head-in, 90 degree parking, the lots studied averaged square feet per car, with a minimum of square feet and a maximum of square feet. Now square feet per car is considered too small an area for shopping center lots, and is a more commonly accepted figure. Baker and Funaro in Shopping Centers: Design and Operation state that feet is the minimum that can be considered satisfactory.
Whatever figure is taken, not more than square feet need be devoted to the space itself. Baker and Funaro recommend a space 9 by 18 feet, and one 10 by 20 feet should be ample. The rest of the area square feet per car by their standards will be used up in aisles, exits and entrances, and landscaping. No land will be saved by making spaces less than 9 feet wide. Since cars are about 7 feet wide, a smaller space will encourage straddling the dividing lines, and the result will be even fewer usable spaces than if they were 9- or feet wide.
Walking from the space to the stores: Once the shopper has safely gotten his car into the best available space, he has only to walk to the stores.
We have been assuming that parking would be laid out around the outside of the store group, with the interior mall reserved for pedestrian movement. See Figures 5—11 below for design of the parking areas in relation to the possible types of store grouping. Some parking lots have concrete sidewalks between the rows of parked cars aisles marked "a" in figures 1, 2, and 3. If they are installed, they should be at least 7 feet wide to allow for the overhang of the front ends of the cars, and to allow room for two people carrying packages to pass each other without difficulty.
The Parkington Shopping Center, which is served by a five-story self-parking structure in the interior of the store grouping, is able to boast that no shopper need walk more than feet from his parked car without being under some cover. Covered walkways for shoppers can be an important feature, especially where the parking is spread out considerably, and the weather often inclement. Multi-story parking garages, because of the relatively high cost per parking space, are not usually recommended by shopping center developers, except where the amount of land is limited and its cost per square foot is high.
For shopping center purposes, it is almost necessary that the structure be a self-service parking garage, and this fact raises some problems of design in a multi-level garage, particularly in the size of the spaces and aisles on each floor, and the width and design of the ramps leading to the floors.
The Parkington self-parking structure has separate ramps leading directly from each floor to the ground. The quantity of parking space is measured in two ways. The older method is to compare the total area devoted to parking with the net retail area of the stores. Thus, if 50, square feet of floor space is devoted to retailing, and , square feet to parking area, we would say the ratio is A more recently used measure is to compute the number ofparking spaces per 1, square feet of store space.
If we assume that each space takes up a total of square feet of parking lot area including aisles, landscaping, etc. By the old method, a ratio of meant that there were three square feet of parking for every square foot of retail space. So, for 1, square feet of retail space, we have 3, square feet of parking. At square feet a space, 10 cars can be parked in that 3, square feet. Therefore, a ratio of by the old method, is equivalent to saying 10 spaces per 1, feet of retail floor area. Table 1 illustrates the relationship between these two methods of calculating parking in relation to sales area.
With these measures in mind, we can talk about the parking area actually needed for a shopping center. Gruen and Smith have worked out a parking "demand" for a proposed shopping center having , square feet of floor space and described in Shopping Centers: The New Building Type see biblio. This design is similar to Shopper's World, Framingham, Mass. An example of how to read this table would be: a ratio of three square feet of parking area to one square foot of floor space is the same as saying For more information on recapture of a section deduction, see Pub.
If you dispose of a car on which you had claimed the section deduction, the amount of that deduction is treated as a depreciation deduction for recapture purposes. You treat any gain on the disposition of the property as ordinary income up to the amount of the section deduction and any allowable depreciation unless you establish the amount actually allowed. For information on the disposition of a car, see Disposition of a Car , later.
You may be able to claim the special depreciation allowance for your car, truck, or van if it is qualified property and was placed in service in Further, while it applies to a new vehicle, it also applies to a used vehicle only if the vehicle meets the used property requirements. For more information on the used property requirements, see section k 2 E ii. See Depreciation Limits , later in this chapter. To be qualified property, the car including the truck or van must meet all of the following tests.
You acquired the car after September 27, , but only if no written binding contract to acquire the car existed before September 28, You placed the car in service in your trade or business before January 1, You can elect not to claim the special depreciation allowance for your car, truck, or van that is qualified property.
If you make this election, it applies to all 5-year property placed in service during the year. To make this election, attach a statement to your timely filed return including extensions indicating the class of property 5-year for cars for which you are making the election and that you are electing not to claim the special depreciation allowance for qualified property in that class of property.
If you use actual car expenses to figure your deduction for a car you own and use in your business, you can claim a depreciation deduction.
This means you can deduct a certain amount each year as a recovery of your cost or other basis in your car. You generally need to know the following things about the car you intend to depreciate. Your basis in a car for figuring depreciation is generally its cost.
This includes any amount you borrow or pay in cash, other property, or services. Generally, you figure depreciation on your car, truck, or van using your unadjusted basis see Unadjusted basis , later. However, in some situations, you will use your adjusted basis your basis reduced by depreciation allowed or allowable in earlier years.
For one of these situations, see Exception under Methods of depreciation , later. If you change the use of a car from personal to business, your basis for depreciation is the lesser of the fair market value or your adjusted basis in the car on the date of conversion.
Additional rules concerning basis are discussed later in this chapter under Unadjusted basis. You generally place a car in service when it is available for use in your work or business, in an income-producing activity, or in a personal activity.
Depreciation begins when the car is placed in service for use in your work or business or for the production of income. For purposes of figuring depreciation, if you first start using the car only for personal use and later convert it to business use, you place the car in service on the date of conversion.
Car placed in service and disposed of in the same year. MACRS is discussed later in this chapter. You must use straight line depreciation over the estimated remaining useful life of the car. To figure depreciation under the straight line method, you must reduce your basis in the car but not below zero by a set rate per mile for all miles for which you used the standard mileage rate.
The rate per mile varies depending on the year s you used the standard mileage rate. For the rate s to use, see Depreciation adjustment when you used the standard mileage rate under Disposition of a Car , later. This reduction of basis is in addition to those basis adjustments described later under Unadjusted basis.
You must use your adjusted basis in your car to figure your depreciation deduction. For additional information on the straight line method of depreciation, see Pub. A qualified business use is any use in your trade or business. However, you do combine your business and investment use to figure your depreciation deduction for the tax year. It is properly reported by you as income to the other person and, if you have to, you withhold tax on the income. It results in a payment of fair market rent.
This includes any payment to you for the use of your car. If you use your car for more than one purpose during the tax year, you must allocate the use to the various purposes. You do this on the basis of mileage. Figure the percentage of qualified business use by dividing the number of miles you drive your car for business purposes during the year by the total number of miles you drive the car during the year for any purpose.
In this case, you figure the percentage of business use for the year as follows. Determine the percentage of business use for the period following the change.
Do this by dividing business miles by total miles driven during that period. Multiply the percentage in 1 by a fraction.
The numerator top number is the number of months the car is used for business, and the denominator bottom number is You use a car only for personal purposes during the first 6 months of the year. During the last 6 months of the year, you drive the car a total of 15, miles of which 12, miles are for business. The amount you can claim for section , special depreciation allowance, and depreciation deductions may be limited.
The maximum amount you can claim depends on the year in which you placed your car in service. You have to reduce the maximum amount if you did not use the car exclusively for business. Your unadjusted basis for figuring depreciation is your original basis increased or decreased by certain amounts. To figure your unadjusted basis, begin with your car's original basis, which generally is its cost.
Cost includes sales taxes see Sales taxes , earlier , destination charges, and dealer preparation. Increase your basis by any substantial improvements you make to your car, such as adding air conditioning or a new engine.
Decrease your basis by any section deduction, special depreciation allowance, gas guzzler tax, and alternative motor vehicle credit. See Form , Alternative Motor Vehicle Credit, for information on the alternative motor vehicle credit. If you acquired the car by gift or inheritance, see Pub.
A major improvement to a car is treated as a new item of 5-year recovery property. It is treated as placed in service in the year the improvement is made. Follow the same steps for depreciating the improvement as you would for depreciating the original cost of the car.
However, you must treat the improvement and the car as a whole when applying the limits on the depreciation deductions. If you traded one car the "old car" for another car the "new car" in , there are two ways you can treat the transaction. You can elect to treat the transaction as a disposition of the old car and the purchase of the new car.
If you make this election, you treat the old car as disposed of at the time of the trade-in. You then figure your depreciation deduction for the new car beginning with the date you placed it in service. This method is explained later, beginning at Effect of trade-in on basis. You must apply two depreciation limits see Depreciation Limits , later. The limit that applies to the remaining basis of the old car generally is the amount that would have been allowed had you not traded in the old car.
The limit that applies to the additional amount you paid for the new car generally is the limit that applies for the tax year, reduced by the depreciation allowance for the remaining basis of the old car. You must use Form to figure your depreciation deduction. This method is explained in Pub. If you elect to use the method described in 1 , you must do so on a timely filed tax return including extensions. Otherwise, you must use the method described in 2.
The discussion that follows applies to trade-ins of cars in , where the election was made to treat the transaction as a disposition of the old car and the purchase of the new car. Regulations section 1. If you trade in a car you used only in your business for another car that will be used only in your business, your original basis in the new car is your adjusted basis in the old car, plus any additional amount you pay for the new car.
If you trade in a car you used partly in your business for a new car you will use in your business, you must make a "trade-in" adjustment for the personal use of the old car. This adjustment has the effect of reducing your basis in your old car, but not below zero, for purposes of figuring your depreciation deduction for the new car. To figure the unadjusted basis of your new car for depreciation, first add to your adjusted basis in the old car any additional amount you pay for the new car.
Then subtract from that total the excess, if any, of:. The total of the amounts actually allowed as depreciation during those years. MACRS is the name given to the tax rules for getting back recovering through depreciation deductions the cost of property used in a trade or business or to produce income. The maximum amount you can deduct is limited, depending on the year you placed your car in service.
You actually depreciate the cost of a car, truck, or van over a period of 6 calendar years. This is because your car is generally treated as placed in service in the middle of the year, and you claim depreciation for one-half of both the first year and the sixth year. For more information on the qualifications for this shorter recovery period and the percentages to use in figuring the depreciation deduction, see chapter 4 of Pub.
This is because the chart has the switch to the straight line method built into its rates. Before choosing a method, you may wish to consider the following facts. Using the straight line method provides equal yearly deductions throughout the recovery period. Using the declining balance methods provides greater deductions during the earlier recovery years with the deductions generally getting smaller each year.
Using this table will make it easy for you to figure the depreciation deduction for your car. A similar chart appears in the Instructions for Form You may have to use the tables in Pub. You must use the Depreciation Tables in Pub. If you use the percentages from the chart, you generally must continue to use them for the entire recovery period of your car. In that case, for the year of the adjustment and the remaining recovery period, figure the depreciation without the chart using your adjusted basis in the car at the end of the year of the adjustment and over the remaining recovery period.
Instead, use the chart in the publication or the form instructions for those future years. If you dispose of the car before the end of the recovery period, you are generally allowed a half year of depreciation in the year of disposition unless you purchased the car during the last quarter of a year.
See Depreciation deduction for the year of disposition under Disposition of a Car, later, for information on how to figure the depreciation allowed in the year of disposition. To figure your depreciation deduction for , find the percentage in the column of Table based on the date that you first placed the car in service and the depreciation method that you are using.
Multiply the unadjusted basis of your car defined earlier by that percentage to determine the amount of your depreciation deduction. If you prefer to figure your depreciation deduction without the help of the chart, see Pub. Phil bought a used truck in February to use exclusively in his landscape business. The unadjusted basis of his truck equals its cost because Phil used it exclusively for business. In , Phil used the truck for personal purposes when he repaired his father's cabin. Phil used Table to find his percentage.
There are limits on the amount you can deduct for depreciation of your car, truck, or van. The section deduction and special depreciation allowance are treated as depreciation for purposes of the limits. The maximum amount you can deduct each year depends on the date you acquired the passenger automobile and the year you place the passenger automobile in service.
These limits are shown in the following tables for For tax years prior to , the maximum depreciation deductions for trucks and vans are generally higher than those for cars. A truck or van is a passenger automobile that is classified by the manufacturer as a truck or van and rated at 6, pounds gross vehicle weight or less. See Reduction for personal use next. The depreciation limits are reduced based on your percentage of personal use. The section deduction is treated as a depreciation deduction.
Jack has reached his maximum depreciation deduction for If the depreciation deductions for your car are reduced under the passenger automobile limits discussed earlier , you will have unrecovered basis in your car at the end of the recovery period. If you continue to use your car for business, you can deduct that unrecovered basis subject to depreciation limits after the recovery period ends. For 5-year property, your recovery period is 6 calendar years. A part year's depreciation is allowed in the first calendar year, a full year's depreciation is allowed in each of the next 4 calendar years, and a part year's depreciation is allowed in the 6th calendar year.
Under MACRS, your recovery period is the same whether you use declining balance or straight line depreciation. You determine your unrecovered basis in the 7th year after you placed the car in service. If you continue to use your car for business after the recovery period, you can claim a depreciation deduction in each succeeding tax year until you recover your basis in the car.
The maximum amount you can deduct each year is determined by the date you placed the car in service and your business-use percentage. In April , Bob bought and placed in service a car he used exclusively in his business. Bob's depreciation deductions were subject to the depreciation limits so he will have unrecovered basis at the end of the recovery period as shown in the following table. The rules that apply in these two situations are explained in the following paragraphs.
For this purpose, "car" was defined earlier under Actual Car Expenses and includes certain trucks and vans. You must figure depreciation using the straight line method over a 5-year recovery period.
Instead of making the computation yourself, you can use column c of Table to find the percentage to use. You also increase the adjusted basis of your car by the same amount. In June , you purchased a car for exclusive use in your business. You will also have to determine and include in your gross income any excess depreciation, discussed next. Use Form , Sales of Business Property, to figure and report the excess depreciation in your gross income.
Excess depreciation is:. This means the amount of depreciation figured using the straight line method. You used the car exclusively in qualified business use for , , , and If you lease a car, truck, or van that you use in your business, you can use the standard mileage rate or actual expenses to figure your deductible expense. This section explains how to figure actual expenses for a leased car, truck, or van.
If you choose to use actual expenses, you can deduct the part of each lease payment that is for the use of the vehicle in your business. You must spread any advance payments over the entire lease period.
If you lease a car, truck, or van for 30 days or more, you may have to reduce your lease payment deduction by an "inclusion amount," explained next. If you lease a car, truck, or van that you use in your business for a lease term of 30 days or more, you may have to include an inclusion amount in your income for each tax year you lease the vehicle. Instead, you reduce your deduction for your lease payment.
This reduction has an effect similar to the limit on the depreciation deduction you would have on the vehicle if you owned it. The inclusion amount is a percentage of part of the fair market value of the leased vehicle multiplied by the percentage of business and investment use of the vehicle for the tax year. It is prorated for the number of days of the lease term in the tax year.
The inclusion amount applies to each tax year that you lease the vehicle if the fair market value defined next when the lease began was more than the amounts shown in the following tables. For tax years beginning , all vehicles are subject to a single inclusion amount threshold for passenger automobiles leased and put into service in You may have an inclusion amount for a passenger automobile if:.
Passenger Automobiles Including Trucks and Vans. For years prior to , see the inclusion tables below. Fair market value is the price at which the property would change hands between a willing buyer and seller, neither having to buy or sell, and both having reasonable knowledge of all the necessary facts.
Sales of similar property around the same date may be helpful in figuring the fair market value of the property. Figure the fair market value on the first day of the lease term. If the capitalized cost of a car is specified in the lease agreement, use that amount as the fair market value. Inclusion amounts for tax years — are listed in Appendices A-1 through A-2 for cars and in Appendices B-1 through B-2 for trucks and vans. For tax years —, the inclusion amounts are listed in Appendices C-1 through C-3 for passenger vehicles including trucks and vans.
For each tax year during which you lease the car for business, determine your inclusion amount by following these three steps.
Locate the appendix that applies to you. To find the inclusion amount, do the following. Find the line that includes the fair market value of the car on the first day of the lease term. Go across the line to the column for the tax year in which the car is used under the lease to find the dollar amount. For the last tax year of the lease, use the dollar amount for the preceding year. Prorate the dollar amount from 1b for the number of days of the lease term included in the tax year.
Multiply the prorated amount from 2 by the percentage of business and investment use for the tax year. This is your inclusion amount. On January 17, , you leased a car for 3 years and placed it in service for use in your business. For the last tax year of the lease, , you use the amount for the preceding year. For each year of the lease that you deduct lease payments, you must reduce your deduction by the inclusion amount figured for that year.
If you lease a car for business use and, in a later year, change it to personal use, follow the rules explained earlier under Figuring the inclusion amount. For the tax year in which you stop using the car for business, use the dollar amount for the previous tax year.
Prorate the dollar amount for the number of days in the lease term that fall within the tax year. He used the car exclusively in his own data processing business. Using Appendix C-2 , Will figured his inclusion amount for and as shown in the following table and reduced his deductions for lease payments by those amounts. If you lease a car for personal use and, in a later year, change it to business use, you must determine the car's fair market value on the date of conversion.
Then figure the inclusion amount using the rules explained earlier under Figuring the inclusion amount. Use the fair market value on the date of conversion. In March , Janice leased a truck for 4 years for personal use.
On June 1, , she started working as a self-employed advertising consultant and started using the leased truck for business purposes. Using Appendix C-3 , Janice figured her inclusion amount for as shown in the following table. For information on reporting inclusion amounts, employees should see Car rentals under Completing Forms in chapter 6.
If you dispose of your car, you may have a taxable gain or a deductible loss. The portion of any gain that is due to depreciation including any section deduction, clean-fuel vehicle deduction for vehicles placed in service before January 1, , and special depreciation allowance that you claimed on the car will be treated as ordinary income. However, you may not have to recognize a gain or loss if you dispose of the car because of a casualty or theft.
This section gives some general information about dispositions of cars. For information on how to report the disposition of your car, see Pub. For a casualty or theft, a gain results when you receive insurance or other reimbursement that is more than your adjusted basis in your car.
When you trade in an old car for a new one, the transaction is considered a like-kind exchange. Generally, no gain or loss is recognized.
For exceptions, see chapter 1 of Pub. In a trade-in situation, your basis in the new property is generally your adjusted basis in the old property plus any additional amount you pay. See Unadjusted basis , earlier. Depreciation adjustment when you used the standard mileage rate.
If you used the standard mileage rate for the business use of your car, depreciation was included in that rate. The rate of depreciation that was allowed in the standard mileage rate is shown in the Rate of Depreciation Allowed in Standard Mileage Rate table, later.
You must reduce your basis in your car but not below zero by the amount of this depreciation. If your basis is reduced to zero but not below zero through the use of the standard mileage rate, and you continue to use your car for business, no adjustment reduction to the standard mileage rate is necessary.
Use the full standard mileage rate In , you bought and placed in service a car for exclusive use in your business. From through , you used the standard mileage rate to figure your car expense deduction. You drove your car 14, miles in , 16, miles in , 15, miles in , 16, miles in , 15, miles in , and 14, miles in The depreciation portion of your car expense deduction is figured as follows. If you deduct actual car expenses and you dispose of your car before the end of its recovery period, you are allowed a reduced depreciation deduction for the year of disposition.
To figure the reduced depreciation deduction for a car disposed of in , first determine the depreciation deduction for the full year using Table If you used a Date Placed in Service line for Jan. If you used a Date Placed in Service line for Oct. The percentage you use is determined by the month you disposed of the car. Figure your depreciation deduction for the full year using the rules explained in this chapter and multiply the result by the percentage from the following table for the month that you disposed of the car.
If you deduct travel, gift, or transportation expenses, you must be able to prove substantiate certain elements of expense. This chapter discusses the records you need to keep to prove these expenses. If you keep timely and accurate records, you will have support to show the IRS if your tax return is ever examined. You will also have proof of expenses that your employer may require if you are reimbursed under an accountable plan.
These plans are discussed in chapter 6 under Reimbursements. Table is a summary of records you need to prove each expense discussed in this publication. You must be able to prove the elements listed across the top portion of the chart. You prove them by having the information and receipts where needed for the expenses listed in the first column.
You should keep adequate records to prove your expenses or have sufficient evidence that will support your own statement. You must generally prepare a written record for it to be considered adequate. This is because written evidence is more reliable than oral evidence alone. However, if you prepare a record on a computer, it is considered an adequate record. You should keep the proof you need in an account book, diary, log, statement of expense, trip sheets, or similar record.
You should also keep documentary evidence that, together with your record, will support each element of an expense. You generally must have documentary evidence, such as receipts, canceled checks, or bills, to support your expenses.
Accountable plans and per diem allowances are discussed in chapter 6. Documentary evidence ordinarily will be considered adequate if it shows the amount, date, place, and essential character of the expense. For example, a hotel receipt is enough to support expenses for business travel if it has all of the following information.
Separate amounts for charges such as lodging, meals, and telephone calls. A restaurant receipt is enough to prove an expense for a business meal if it has all of the following information. A canceled check, together with a bill from the payee, ordinarily establishes the cost. However, if you charge these items to your employer, through a credit card or otherwise, you must keep a record of the amounts you spend.
In the case of car insurance, the IDV of your car is the Sum Assured amount when you raise a claim during the policy period against your car insurance. In other words, it is the approx. Based on this value, your insurance provider will decide your claim amount. This also helps in determining the premium rate for your vehicle. Rahul plants an apple tree. He lives in a flood-prone area and fears that the tree might get uprooted. He visits an insurance company for an insurance policy for the apple tree.
Now he needs to declare the worth of the apple tree. He quickly calculates that each year the tree bears around apples, and each would cost approx. Thus, he declares the IDV as Rs.
In case the tree gets destroyed in floods, the insurance company will pay him approx. In this example, understand that Rs. It is the Insured Declared Value declared by the owner. IDV is the approximate market value of the car. It is the maximum amount you can get i. IDV changes every year due to depreciation. You will be liable to get the highest value of IDV only when your car gets stolen or in case of damage beyond repair.
Also, the higher the IDV, the higher the premium amount and vice-a-versa. Thus, it also helps in calculating the payable premium while buying a car insurance policy. The insurance company in this case ACKO will calculate this amount at the time of claim settlement. Then we would adjust this value for depreciation. Every car depreciates in time. The age of the vehicle, wear and tear influence the depreciation of the car. The depreciation of your car starts as soon as you drive your car out of the car showroom.
All car owners should be aware of the rate of depreciation for fixing the IDV. The registration and the insurance cost are not included in the IDV value. The cost of car accessories not fitted by the manufacturer is also calculated separately if insurance is required for accessories. Note: For vehicles more than 5 years old, depreciation is not considered while fixing the IDV.
The insurer e. Post the assessment, both the insurer and the policyholder will have to mutually agree on the IDV. Below is the formula to calculate IDV in car insurance. The Insured Declared Value is one of the primary factors which influences the car insurance premium amount. Here are some points to remember while calculating it in car insurance.
Do not reduce the IDV so that the premium is lower. This will reduce your claim amount in case of any losses incurred. Do not provide an inaccurate IDV as this could lead to a possible decline of your claim. The IDV value is dependent on a few factors related to your car. Here is a list of those factors. The value of a car depends upon its type. A hatchback car is usually cheaper as compared to sedans or SUVs.
Thus, the IDV would vary accordingly. Various car models of the same type, say a sedan, can have different IDVs. This depends upon the brand i.
There is a slight difference in the cost of a car depending upon the location of purchase. For example, the ex-showroom price of the same model can be different in Mumbai and Delhi. The implementation schedule of EU emission standards in India is summarized in Table 1. The above standards apply to all new 4-wheel vehicles sold and registered in the respective regions. In addition, the National Auto Fuel Policy introduced certain emission requirements for interstate buses with routes originating or terminating in Delhi or the other mentioned cities.
Bharat Stage IV standards for gasoline fueled 2-wheelers came into force April 1, The roll out of Bharat Stage IV limits nationwide was delayed by the challenge of convincing fuel producers to make the necessary investments required to supply 50 ppm sulfur fuel nationwide.
Potential solutions that have been suggested include deregulation of diesel prices, an environment compensation charge on diesel vehicles and an additional levy on diesel fuel. Even in cities with Bharat Stage IV limits, there have been challenges ensuring the dominance of compliant vehicles.
Some of these challenges include: exemptions granted to some specialty vehicle e.
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