Q:

Subject: 179 on Motor-home

 

Can I take section 179 on a motorhome I am purchasing for my business even though I have taken 179 on previous assets in prior tax years.   Is it a lifetime max of 100K or each year max?

 

Also,  Can I further depreciate the motorhome over a period of 3 years for the difference in the 179 deduction and the purchase price of $270,000?

 

What other write-offs can I take (i.e. interest, gas, repairs)?

 

Many Thanks,

A:

Each year, you start off with a fresh eligibility for the Section 179 deduction.  What you claimed on the previous year's tax return doesn't affect this year's deduction.  Many business owners actually budget their business equipment purchases accordingly, spreading them out over multiple years in order to be able to claim the maximum each year. 

Assuming that your motorhome will be used 100% for business, and the total of Section 179 assets that you acquired during the year is less than the statutory limit ($420,000 for 2005) you can claim Sec. 179 on the motorhome and then depreciate the remainder of the cost over five years. 

If the motorhome is being used 100% for business, all related expenses for it (fuel, insurance, repairs, license, storage, washing, etc) would be deducted on the same schedule as where you are claiming the Section 179 and depreciation.

If the motorhome is being used less than 100% for business, you will need to prorate all of the costs, including Section 179, to only deduct the business percentage.  Of course, if the business usage is less than 50%, it is not eligible for any Section 179 deduction.

If you are serious about properly managing your business, you must be working one on one with a tax pro and not just relying on tidbits of tax info that you come across on the internet.

Good luck.

Kerry Kerstetter

 

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 11/01/2005 11:41:00 PM Send this post: