Mileage Reimbursement Income

Can anyone verify how this is calculated in ATR? From what we read it seems that if the customer gets $.56 per mile reimbursement for business travel then you can count $.22 cents per mile as income. Anyone agree or have another option?

How does mileage reimbursement at the IRS rate equate to income? It's a wash.

The IRS considers .23 cents of the mileage used for business as depreciation. If the borrower only takes the expense in the form of mileage you can use this method to determine depreciation for non cash expense as an add back item.

Can you explain? The rest of the mileage reimbursement is for fuel, maintenance, etc. How do you figure this as a add back unless you can determine the method under which this is all accounted?

I charge $.56 a mile and I deduct $.56 cents a mile on my taxes - where is the add back?

If a person were to itemize the deductions and on Sched. C take depreciation as a deduction and didn't have mileage at all you could add back the depreciation figure as income just like on MGIC's SAM form for self-employment for example. If line 28 (depreciation) is blank you are allowed to consider .23 (for 2013) of the .56 of business mileage depreciation and use that instead of what you would normally get from line 28. This is also found http://www.irs.gov/pub/irs-drop/n-12-72.pdf which shows you the amount which is consider depreciation. Make sense?

My follow-up question... I would think this would also apply to situations when the borrower has an ownership interest in a business, like a partnership or LLC, etc. Not only to Schedule C, sole prop. I'm with you MTGBNKR. I know exactly what you're taking about.