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Old 09-26-2004, 06:39 PM   #1
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Default 6000 LB SUV/Pickup/Van for businesses - I think it's Section 179

My parents/ uncle recently started to import goods from Sri Lanka (clothing products)- Name brand stuff- Real deal as in what you see at Mervins/ JCP/Sears/Kohls. And my parents have friends with small stores near by and they were thinking of selling the clothing in the stores and also selling other Sri Lankan food products to small asian food stores.

And also my uncle recently started to buy and sell forclosures. He's a realtor/broker (own private company) he also works with a big (local) real estate company in my area on occasions. And also he fixes the houses and sells them.

Any chance that we could purchase a over 6000 lb suv/truck and write it off for buisness use(which it's only going to be used for that stuff too)..

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Old 09-26-2004, 06:43 PM   #2
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Default Re: 6000 LB SUV/Pickup/Van for businesses - I think it's Section 179 (Scoobywrx)

Section 179 allows a business to depreciate up to $100,000 of the value of qualified property in the year the asset(s) were put in service in addition to typical depreciation and bonus depreciation (see below). If the total qualified property purchased in any one applicable year exceeds $400,000, the maximum deduction is reduced dollar-for-dollar. Allowance is available on vehicles with GVWR* above 6,000 pounds or vehicles modified for commercial purposes with shelving or bins or substantial painted signage on the vehicle from independent suppliers.** Bonus Depreciation Highlights. In addition to the Section 179 deduction, the new bonus depreciation rule allows an additional first-year depreciation deduction of 30% to 50% of the qualifying property's cost, depending on the taxpayer's choice. Professionals and small business owners should consult their tax advisor to determine the benefits and limitations of Tax Code Section 179 and these recent tax law changes for their business.

get them to talk to an accountant that is knowledgeable.
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Old 09-26-2004, 06:48 PM   #3
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Default Re: 6000 LB SUV/Pickup/Van for businesses - I think it's Section 179 (Scoobywrx)

Section 179 didn't get nicknamed the Escalade deduction for no reason...

http://www.taxpayer.net/TCS/wh...k.htm points out that all SUV's turn out to be fully deductible in the first year, with the exception of the Hummer H1 (an expensive little bugger at $110,000. Only $106,000 is deductible under Section 179 and other allowances).

The Hummer H2 at $50,590 (all 8,600 pounds of it!) is fully deductible, as are all other SUV's. The link lists other SUVs and trucks that qualify.

Be careful of the recapture clause however summarized below:

Watch for a Hidden Pitfall in the Section 179 Deduction

If you made several equipment purchases for your business this year, you should know about the Section 179 deduction that allows you to immediately expense up to the entire cost of the assets you purchased (limited to $100,000 for 2003). But beware of a hidden pitfall within Section 179 the recapture rule.

If a deduction eliminates money from your income, a recapture puts it back and then you owe taxes on that unexpected income. But why would you be forced to recapture the money you deducted, using Section 179?

You must recapture your original Section 179 deduction if:

* Your business use of an asset drops below 50% for whatever reason. (Perhaps you disposed of it or converted it to personal use).
* This event occurs within the asset's recovery period (the length of time it will take you to get back the full cost of the asset through the deductions for depreciation). Defined by the IRS, a particular asset's recovery period may be as short as three years for certain farm equipment and rent-to-own property, or five years for computer hardware) and as long as seven years (most office equipment, phones, and general tools).

Wonder why I know this stuff....
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Old 09-26-2004, 06:57 PM   #4
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Default Re: 6000 LB SUV/Pickup/Van for businesses - I think it's Section 179 (BigMoose)

also more useful stuff...

IRS Publication 334: Tax Guide for Small Business
http://www.irs.gov/pub/irs-pdf/p334.pdf

IRS publication 463: Travel, Entertainment, Gift, and Car Expenses
http://www.irs.gov/pub/irs-pdf/p463.pdf

IRS Publication 946: How to Depreciate Property
http://www.irs.gov/pub/irs-pdf/p946.pdf

IRS Supplement to Publication 946: How to Depreciate Property
http://www.irs.gov/pub/irs-pdf/p946supp.pdf
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Old 09-26-2004, 06:59 PM   #5
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Default Re: 6000 LB SUV/Pickup/Van for businesses - I think it's Section 179 (BigMoose)

So how does it work?? The money saved needs to be invested in the buisnesses?
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Old 09-26-2004, 07:02 PM   #6
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Default Re: 6000 LB SUV/Pickup/Van for businesses - I think it's Section 179 (Scoobywrx)

Quote:
Originally Posted by Scoobywrx
So how does it work?? The money saved needs to be invested in the buisnesses?
How to Avoid Recapture
To avoid running into this problem when choosing a Section 179 deduction for newly-purchased assets in your business, be sure that the business use will remain above 50% throughout the asset's recovery period. Otherwise, you may find yourself forced to recognize unexpected and unwelcome income and pay unnecessary taxes as a result

http://www.selfemployedweb.com...s.htm
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Old 09-26-2004, 07:07 PM   #7
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Default Re: 6000 LB SUV/Pickup/Van for businesses - I think it's Section 179 (del_parker)

Car will be used for buissness purposes only.. It's just my parents are thinking of buying another car to use it for that purpose.. I was online searching for buisness deductions and then found about the Section 179. Pickups are valid too or no?
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Old 09-26-2004, 07:10 PM   #8
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Default Re: 6000 LB SUV/Pickup/Van for businesses - I think it's Section 179 (Scoobywrx)

Quote:
Originally Posted by Scoobywrx
Car will be used for buissness purposes only.. It's just my parents are thinking of buying another car to use it for that purpose.. I was online searching for buisness deductions and then found about the Section 179. Pickups are valid too or no?
"Allowance is available on vehicles with GVWR* above 6,000 pounds or vehicles modified for commercial purposes with shelving or bins or substantial painted signage on the vehicle from independent suppliers."

all half ton and larger pickups are eligible.
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