Q:

Subject: Re: sec 179=100% vehicle deduction for 100% business use.

Dear Sir,

I read your free service in your web site and I heard about your good reputable name and appreciate if you can kindly advice me.

 

I recently become a realtor(self employed) and my income source is comission.Recently got a good comission for closing some properties.I plan to buy a car soley for my realtor business.I do have another car for my personal use.

 

Questions:-

 

If I buy a new car for $25,000 in dec 2005,can I deduct all the $25,000 under sec 179 or do I have to prorate the deduction since I purchase the car in dec 2005?

Must I pay all cash in order to deduct the 25,000 under sec 179?

Is there a specific type of vehicle that i need to buy before I am eligible for the full deduction of $25,000?

 

Can I buy the vehicle under my personal name since I am a realtor and my realtor comission received is under my name.?

 

Looking forward to experience your good advice.

Thank you very much

 

Regards,

A:

None of the info I post on any of our websites, nor emails such as this, are intended to replace the personal services of a competent tax pro, who can more accurately evaluate your personal situation.  Any good tax pro should be able to help you save many times more in taxes than his/her fees, as well as help you stay out of trouble with the tax authorities.

Any competent tax pro can easily answer the questions you raised. I have also previously discussed them at more length on my blog and main website.


The full Section 179 deduction is available regardless of when in the tax year the asset was acquired and placed into service.  The last week of the year is a very popular time for people to shop for SUVs and other heavy vehicles.

The Section 179 deduction is the same regardless of how the vehicle is financed.  You can claim the same amount whether you pay all cash or finance the entire price.

The $25,000 deduction is only available for SUVs or cars weighing more than 6,000 pounds.  Passenger vehicles weighing less than that are eligible for a lower Section 179 amount.  Trucks and utility vehicles over 6,000 pounds are eligible for up to $105,000 of Section 179 deduction.

If you are not incorporated, the name on the title of the vehicle isn't relevant for tax deduction purposes.  I t can be either your own name or that of your unincorporated business.  What is critical is how it is being used, measured by miles driven.

I have a lot of info on Section 179 on my main website.

As I said, I have also covered all of these issues in much more detail on my blog.

Go there and do a search under 179 and you will find dozens of postings.

Again, don't actually implement any tax motivated action until you have consulted with a tax pro who you actually pay for advice.  Free advice, even from me, is worth just that.

Good luck.

Kerry Kerstetter

Follow-Up:

Kerry Kerstetter,

Thank you very much for your excellent advice and links.

 

Have a blessed thanksgivings

 

 

Labels: 179

- posted by Kerry M. Kerstetter, MBA~CPA~ATP~ATA @ 11/23/2005 11:57:00 AM Send this post: