Q:

Miss Kerstetter,

Let me start off by asking if you provide accounting services?  I am based in Hot Springs.

I found your information on the recent changes to section 179 in relation to vehicle purchases very helpful.  I would like to ask if you could provide additional information about vehicle purchases under section 179.  I understand that the deduction is limited to $25,000 after October 22 2004 and that the vehicle should be used more than 50% for business.

I am considering purchasing a business truck for trips to UPS, the bank and post office.  More than 50% of the mileage will be for business usage however I expect to put 5K or less miles per year on the vehicle. 
With it being December already I may not put more than 500 miles on the vehicle.  In order to get the best price I may purchase the vehicle from a dealer several hundred miles away.

This raises two questions

1. Is there any minimum mileage required for section 179?

2  Can mileage between the dealership and home office when picking up the vehicle be counted as business mileage?

Thank you in advance for your advice!

A:

There are no minimum number of miles required by IRS to qualify for the Sec. 179 deduction.  There just have to be some miles driven, which need to be allocated on a percentage basis between business and personal.

If the vehicle will be used more than 50% for business in the future, I would consider the trip to pick it up and drive it home to be a business trip.

The $25,000 limit is only for SUVs and is not for trucks.  You can see a lot more info on my website at:
http://www.taxguru.org/incometax/Rates/Sec179.htm

I hope this helps.

Kerry Kerstetter

I am not currently accepting any new CPA clients; but everyone is welcome to check out my latest news & commentaries at: www.TaxGuru.net and the reference materials at www.TaxGuru.org 

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 11/30/2004 10:08:00 AM Send this post: