Mileage guide
Replacing a business vehicle midyear: close one log and start another
By FlatMile ·
General US federal recordkeeping information, not individual tax advice. Tax treatment depends on your circumstances; consult a qualified adviser for your claim.
At a glance
When you replace a business vehicle during the year, keep a separate mileage history for each vehicle. Record the handover date and each car's own odometer evidence. The new car does not inherit the old car's odometer, mileage totals or tax-method history.
The useful output is a two-vehicle handoff package: journey records for each car, a clear boundary between them, and purchase or disposal documents for your preparer. A mileage total alone cannot calculate a sale, trade-in, depreciation adjustment or gain.
Record the transition while both cars are available
Photograph or note the outgoing vehicle's odometer before handover and the incoming vehicle's odometer when received. Retain the date and a vehicle identifier alongside each reading. The purchase date and the date a vehicle becomes available for business use may need separate explanation; preserve both rather than choosing whichever produces a convenient total.
Keep the old car visible in your archive. Renaming it to the new car can make old trips appear to belong to the replacement. Where an app supports vehicles, inspect the assignment of journeys around the change. If your record is a spreadsheet, use a vehicle column and separate control totals.
A fictional July handover
Alex returns Car A on July 16 and begins using Car B on July 17. The following numbers describe use during the recorded ownership periods, not a tax deduction:
| Vehicle | Opening reading | Closing reading | Distance | Business miles |
|---|---|---|---|---|
| Car A | 42,000 | 48,400 | 6,400 | 3,100 |
| Car B | 120 | 5,420 | 5,300 | 2,800 |
| Combined journeys | Separate readings | Separate readings | 11,700 | 5,900 |
The subtraction for Car A is 48,400 minus 42,000. For Car B it is 5,420 minus 120. Subtracting Car A's January reading from Car B's December reading would be meaningless.
Alex's trip records must still support the 3,100 and 2,800 business-mile figures. The combined total is a reconciliation check. It is not a reason to apply one business-use percentage or one method to every cost for both vehicles.
Check the day that crosses the boundary
Open the last several journeys assigned to Car A and the first several assigned to Car B. Check a dealership visit, any temporary replacement or rental, and any journey made by another household member. A calendar transition can be neat while the actual transport arrangements overlap.
If a journey is assigned incorrectly, correct the vehicle record using the supported editing workflow and retain a note of the correction. Do not create a duplicate trip simply to put its miles under a different car. Keep a dated original export before making a large batch of corrections.
Send documents that mileage cannot replace
Give the preparer the old purchase records and prior depreciation or method workpapers, sale or trade-in documents, and the replacement purchase or lease agreement. IRS Publication 463 addresses vehicle dispositions; the tax outcome depends on more than the trade-in amount shown in an advertisement.
Prepare a one-page index listing each vehicle, use dates, business miles and total miles. Attach the separate logs and highlight unresolved days. Our accountant handoff guide explains how to make that package easy to review. Preserve both vehicles' records after the new car becomes your daily driver.