I have a sno cone trailer and equipment (about $10K in capital) that has been down two years out of three I have been depreciating (because the truck I was using died on me). This is a seasonal business, about 6 months of year (I do events in Texas).

Now I see this Section 179 thing and am wondering if I can buy a truck at end of year (2004) and take the deduction in 2004 for the entire thing ($30K). I will be able to get the business going again in March 2005.

The Section 179 expensing election has been around for several years; but it's just recently been increased to the current level of $100,000+ per year.

One key requirement that has always been part of Section 179 is that the asset must actually be placed into service during the year for which you are claiming the deduction. In other words, you can't buy the new truck and claim any depreciation or Sec. 179 on your 2004 tax return if you don't actually start using it in your business until 2005.

What you may want to consider doing is reactivating your business before the end of this December and use the new truck to run business related errands, such as buying supplies.

I hope this helps. You should obviously consult with your own personal tax advisor for the best customized strategies for your case.

Kerry Kerstetter

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 10/11/2004 06:11:00 PM Send this post: