Rev. Proc. 74-24

In line with the adoption of an increase in the standard mileage rate for computing the allowable deduction for the cost of transportation by automobile under section 162 of the Internal Revenue Code of 1954 (See Revenue Procedure 74-23, page 476) it is deemed appropriate to increase the 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, and for transportation for medical care under section 213, with respect to returns filed for taxable years beginning after December 31, 1973.

Certain 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. See Rev. Rul. 58-279, 1958-1 C.B. 145, and Maurice S. Gordon, 37 T.C. 986 (1962). Accordingly, an individual may not use the same standard mileage rate as is permitted by Rev. Proc. 74-23, page 476, for an automobile used in a trade or business. Therefore, for taxable years beginning after December 31, 1973, it has been determined that seven 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. However, parking fees and tolls attributable to such transportation may be deducted as separate items.

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 deductions for any expenses relating to the automobile which are allowable under section 163 (interest) or section 164 (taxes other than those included in the cost of gasoline). 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 nonreimbursed transportation expenses for charitable and medical purposes exceed this rate, the taxpayer may deduct such actual expenses.

With respect to returns filed for taxable years beginning after December 31, 1973, this Revenue Procedure supersedes Rev. Proc. 70-24, 1970-2, C.B. 505, which relates to periods after December 31, 1969.

¹ Also released as Technical Information Release 1299, dated August 12, 1974.