Rev. Proc. 64-15

In line with the adoption of a standard mileage rate for computing the allowable deduction for the cost of transportation by automobile under section 162 and section 212 of the Internal Revenue Code of 1954 (see Revenue Procedure 64-10, page 667, this Bulletin), it is deemed desirable to also adopt a standard mileage rate for computing the cost of operating an automobile for transportation in connection with rendering gratuitous services to a charitable organization under section 170 of the Code and for transportation for medical care under section 213 of the Code.

Revenue Ruling 58-279, C.B. 1958-1, 145, holds that only those expenses incurred for operation, repair, and maintenance which are directly attributable to the use of a vehicle in rendering gratuitous services to a charitable organization may be deducted as a charitable contribution. It further holds that no deduction is allowed for the fair rental value of such use, or for the depreciation occasioned by such use.

The Tax Court of the United States, in the case of Maurice S. Gordon, et ux v. Commissioner, 37 T.C. 986 (1962), held that depreciation of an automobile used for transportation to secure medical services is not an "expense paid" nor an "amount paid" for medical care within the meaning of section 213 of the Code, but is merely a decrease in value.

Inasmuch as all items relating to the use of an automobile may not be taken into account in computing the amount paid for transportation with respect to the rendering of gratuitous services to charitable organizations or with respect to medical care, for example, depreciation, an individual may not use the same standard mileage rate as is permitted by Revenue Procedure 64-10, supra, for an automobile used in a trade or business or for the production of income. It has, therefore, been determined that five cents a mile is a reasonable rate which may be used to compute the cost of operating an automobile where such transportation expenses are deductible as a charitable contribution under section 170 of the Code or as a medical expense under section 213 of the Code.

The use of this rate shall be in lieu of any amounts otherwise allowable under sections 170 and 213 of the Code by reason of the use of a taxpayer's automobile for transportation. However, the rate prescribed herein does not affect a deduction for any expenses relating to the automobile which are allowable under section 163 of the Code (interest) or section 164 of the Code (taxes). Similarly, since depreciation may not be taken into account in determining the deduction for contributions or medical expenses, no adjustment to the basis of the automobile is required because of the use of this rate.

The standard mileage rate prescribed herein will be accepted by the Internal Revenue Service as being representative of the cost of operating an automobile for purposes of sections 170 and 213 of the Code regardless of the method used to compute depreciation for business use of the automobile, and regardless of the number of automobiles that the taxpayer may have in operation. Use of this standard mileage rate, however, is not mandatory and where a taxpayer's allowable non-reimbursed transportation expenses for charitable and medical purposes exceed this rate, the taxpayer may deduct such actual expenses.

This Revenue Procedure is applicable with respect to all periods after December 31, 1962.

² Also released as Technical Information Release 546, dated Feb. 11, 1964.