| “My husband did some consulting job in 2011, but received the payment in April, 2012.”-=========>He needs to report his self employment income on his 2012 return as a cash basis TP; the IRS requires you to report all payments of cash or its equivalent as gross income in the tax year you receive it
“Soon after that he purchased a car, meanwhile traded-in the car he used to "conduct the business" . The total mileage/ odometer record has gone with that vehicle. Is there a way I can claim this business expense?”-==========>In general, as you can see, you need to keep a record of how much you use your car for business purposes throughout the year 2012. You do not have to provide documentation of your business use with your taxes, but you may have to produce supporting evidence of your claim if you are ever audited. A mileage log that tracks where you went, what business purpose that trip met and how many miles it was from destination to destination will suffice. OR you may request a copy of The total mileage/ odometer record from the new owner, I guess. If you had your car serviced regularly at the same dealer/garage they will have records of your mileage. If this is not possible you can re-create your mileage by listing your clients/business contacts/jobs and the days you visited them. You can also get a statement from people you visit on a regular basis confirming you actually visited them on the days you stated. It could be a lot of work but will be necessary if the IRS ever asks for proof. SO, You can use the other info to create a log book but try to estimate on the low side just in case they want proof.
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