Electric Car as a Business Expense

[Joe Splitrock]

We are in a situation where my wife is soon to be quitting her job to focus more on the rental business. My daughter will be getting her drivers license this year, so we will need to add a third car. We could probably get by with two cars, accept the rental properties mean we need a third car for situations where I am at work, my daughter is at school and something needs to be done at a rental property. We have been claiming mileage and put on about 2500 miles last year for rentals. We are looking to buy a new car that will be under 6000 pounds. We want to expense the new car against the rental business, but I have some questions and looking for advice. I understand I need to discuss with my CPA. I am just trying to get educated and multiple opinions:

1. New vehicle will be $60,000 but with $7500 federal tax credit for electric. What is the best method to depreciate and how does that work per year? Any bonus depreciation or good strategies here?

2. We will use the car for 60-75% business and the rest personal. Is it correct that I just prorate based on percentage use? Is that done with all expenses at the same ratio? How about if your split between business and personal changes every year, can you adjust each year or are you stuck into a set percentage?

3. If I finance versus pay cash, can I claim interest expense? 

4. Can I claim sales tax in the year I purchase? 

5. It is electric, so no gas bill to claim. I can claim expenses on billable chargers pretty easily, but how do I claim home electric use? Do I just calculate split based on KW charging hours and keep some records of my bills to substantiate?

6. Can I expense license plate/registration and insurance? 

7. Should the vehicle registration be in the business name or personal or does it not matter for tax purposes?

8. We drive 2500 per year for the business, so is that substantial enough to justify a car? Do I need to keep any type of mileage records similar to what I am keeping right now when claiming mileage deduction?

9. If we chose to continue claiming just mileage, are there other expenses I can still claim? Vehicle registration, insurance, sales tax, etc OR does mileage mean ALL expenses are part of that?

@Natalie Kolodij @Michael Plaks @Ashish Acharya  and any other BP tax experts, please share your advice.