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Do You Really Tax Deduct the Expenses From Your DougCars?

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author photo by Doug DeMuro May 2017

Welcome to the latest round of Ask Doug, everyone's favorite weekly column wherein you write in and Ask Doug a question, and Doug scoffs at your question and answers one from someone with a cool e-mail address, such as "FluffyAardvark37."

If you'd like to participate in Ask Doug, you can! Just e-mail me at OversteerDoug@gmail.com, and I will gladly: a) read your e-mail, and b) discard it, presumably. However, there is a very small chance I may publish it here on Oversteer, where it can be viewed by thousands of human beings who enjoy the wonderful intersection of reading and cars, and also wasting time at work.

Today's letter comes to us from a reader I've named Brian, who writes:

Doug,

This is something I am quite curious about, but I really don't want you to feel like I am prying too deeply. I would simply like to know if your cars are actually used in such a way that you get to claim nearly all of the expenses of them as a business expense? From the outside it seems likely that you can.

Most of us cannot claim our cars as a business expense since we use them as a personal tool to go to and from work and/or to drive for pleasure. However, since you write about nearly everything you do in the #Dougcars and that writing is your job, it seems that you can probably claim nearly all the expenses of owning those cars as a legitimate business expense, especially, and depreciation you incur when selling them, and any interest you may have to pay on buying them.

So, is that correct that you get to claim all those fun vehicles as an expense?

Brian

For those of you who don't wish to read what Brian has written, allow me to sum it up for you: Brian is asking if I can really claim my "DougCars" as deductible on my income taxes, allowing me to write off the expenses of owning such vehicles. The answer, Brian, is yes.

For the last four years, I have indeed claimed my "DougCars" as tax-deductible business expenses, and I've written off virtually everything associated with them: insurance, maintenance, repairs, depreciation and even gasoline if I'm going on a particularly long video shoot. Outsiders love it when they hear this, because they think I've found a cool way to scam the system. But I'm not cheating at all.

The primary reason I say this is because the simple truth is that I don't drive the DougCars except when I'm using them for business purposes. I really, truly, deeply don't. I bought my Dodge Viper precisely nine months ago, and I've used it for a personal errand exactly one time in that nine months: I drove it to dinner with my fiancee the first week I had it. After that, it's sat in my parking garage -- sometimes for weeks -- between video shoots. I've put less than 1,000 total miles on it since I got it, and 500 of those miles were driving it home from North Carolina.

This was also true of all my previous DougCars. I drove my Ferrari a lot more, but almost never for purposes other than work. And as for my Hummer and my Nissan Skyline GT-R, I literally never drove them for non-work purposes: The Hummer was truly awful to drive, so I avoided it as much as possible -- and I kept the Skyline at a storage facility roughly 25 minutes from my house, meaning I never really wanted to go and get it unless I had to. In the end, I drove my Skyline about 2,000 miles during the year I had it, and I covered just 1,000 miles in my Hummer.

Generally speaking, there are two important truths you should know about the DougCars. Number one is that these aren't usually the cars I would've purchased, if I were the one choosing. I'm not a Hummer guy. I'm not a Viper guy. I'm not even really an Aston Martin guy. In almost all DougCar cases, I only bought them because you, the readers, recommended them -- and in almost all cases, I purchased them solely to partake in fun things, and to show you what happens when I do it. You wanted to see a Hummer on a race track. You wanted to see a Skyline on a dyno. It still blows me away when people come up to me and ask "WHY'D YOU BUY A HUMMER, MAN?!" The answer is always the same: not because I wanted to. I bought it to tell good stories.

The other thing you should know about the DougCars is that, on the rare occasions I do drive them for personal use, I'm terrified. This is largely because these cars have enormous value to me as tools for my business -- and if I damage them (or if they break down) while I'm driving, for example, to the post office, I could be without content for days or weeks. So it really, truly doesn't make sense for me to use these vehicles unless I'm doing it for some business purpose.

As a result, if you ever see me in any of my DougCars, it's almost certainly because I'm just coming back from a video shoot -- or I'm just heading to one. The exception is my new Land Rover Defender, which I'm enjoying a bit too much to keep it parked all the time. Maybe that one won't be quite as tax deductible as the rest.

Doug DeMuro is an automotive journalist who has written for many online and magazine publications. He once owned a Nissan Cube and a Ferrari 360 Modena. At the same time.

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Do You Really Tax Deduct the Expenses From Your DougCars? - Autotrader