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Old 04-16-2018, 05:36 PM
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Join Date: Oct 2017
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SUV Sec 179 and Section 168(e)(6) Deduction

Hello,

Under the new tax law with Section 179 &/or Section 168(e)(6) bonus depreciation, can i now write off 100% of a $50,000 new (or used) SUV the very first year?

(Assuming I use the SUV 100% for business the first year, and at least 51% per year the following years?)

Thank you,

BH-Realty



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Old 04-16-2018, 08:57 PM
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Join Date: Oct 2010
Posts: 5,071
Under the new tax law with Section 179 &/or Section 168(e)(6) bonus depreciation, can i now write off 100% of a $50,000 new (or used) SUV the very first year?==========>yes; SUVs that don?t qualify as passenger automobiles are not subject to the IRS limits and can take a full depreciation deduction each year. AlsoUsing bonus depreciation and/or Section 179, you may be able to deduct all or most of the cost of such a vehicle in a single year.For 2018, the total amount you can use for the Sec 179 deduction is $1M. This cap is reduced dollar-for-dollar by the amount exceeding a certain amount each year. For 2018, that amount is $2.5M. thus, the entire deduction goes away once $3.5M in purchases is reached . Right now in 2018, bonus depreciation is being offered at 100%.however, You cannot deduct more than your business net income for the year. So if your net income is $20k, you cannot use the $50K deduction to generate a tax loss for the year.

(Assuming I use the SUV 100% for business the first year, and at least 51% per year the following years?)==========>> If the business use of the asset of the SUV drops below 50% during its depreciation life span of the asset, then, you may have to recapture the Sec 179 deduction on form 4797 taxed at ordinary tax rate.



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