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Old 02-05-2012, 11:52 PM
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How much can be written off a new Acura SUV that I have used 75% for business, in 2011 that was purchased for $46,000 (weight exceeds 6k lbs)?

Hi Taxguru,

I recently purchased a New Acura SUV MDX for over $45,000 that was used for over 75% for business, in 2011.

Could you please advise me what is the maximum amount that can written off for 2011 with respect to depreciation or Sec 179?

Appreciate your help..



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Old 02-06-2012, 03:42 AM
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“How much can be written off a new Acura SUV that I have used 75% for business, in 2011 that was purchased for $46,000 (weight exceeds 6k lbs)?”---->Your SUV with a gross vehicle weight rating above 6,000 lbs but no more than 14,000 lbs can qualify for expensing up to $25,000 if the vehicle is financed and placed in service prior to Dec 31st 2011 and meets other conditions.However,the vehicle in question must also be used for business at least 50% of the time and these depreciation limits are reduced by the corresponding % of personal use if the vehicle is used for business less than 100% of the time. Remember, you can only claim Section 179 in the tax year that the vehicle is placed in service meaning when the vehicle is ready and available even if you're not using the vehicle. Further, a vehicle first used for personal purposes doesn't qualify in a later year if its purpose changes to business. ALSO,the total cost that you can deduct each year is limited to your taxable income from the active conduct of any trade or business during the year 2011. So if you’d like to get some big bucks back from same major business expenses this year, you should elect to file the 179 deduction, because this will not automatically be done for you.For example, if your net trade or business income from active conduct of trade or business was $34,500 in 2011, then yoiur 179 deduction cannot exceed $34,500 for 2011. However, Sec 179 deduction not allowed for any year because of this limitation can be carried over to the next year.
“I recently purchased a New Acura SUV MDX for over $45,000 that was used for over 75% for business, in 2011.“Could you please advise me what is the maximum amount that can written off for 2011 with respect to depreciation or Sec 179?”----> I guess needless to say, it depends on your business financial situation and needs, however, as you can see, Sec. 179 cannot cause a tax loss, I mean, NOL for your business. You can take a Sec. 179 write-off only to the extent that it offsets income. Once taxable income is reduced to zero, you can carryover what remains of the Sec. 179 deduction. But, 100% bonus depreciation is not limited by taxable income. It can be used to generate a tax loss. For pass-through entities, such as an S corp or partnership, owners may be able to deduct their share of a loss against other current-year income. And, a loss may qualify under loss-carryback rules, enabling an owner to claim a refund on taxes paid for previous years’ profits. For example,for SUVs, pickups and vans weighing more than 6,000 pounds, the Sec. 179 deduction is limited to $25,000 or your TI. But bonus depreciation can be used to write off the entire cost of these vehicles in the year they are placed in service (i.e., purchased), assuming that they are used 100% for business.



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