Vehicle write off
Ok then, they used to allow vehicles over 5k weight to write offexpense 80% in the first year for fed tax reasons, but that got abused by the SUV crowd so the gov upped it to 6,000 lbs. New Chevy vans weigh just about 5,000lbs for the 3500's. I am thinking add a factory option dolly lift to the back end to bump the vehicle weight leaving the showroom to over 6,000 lbs. Does this sound like a good idea or is it right up there with all my other failure schemes? This is for real, my old 83 is rapidly giving up the ghost.
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Just take the milege
This is not the gas mileage write off it is the purchase of equipment write off. Two separate items. This could amount to be in the range of 28k write off if my thinking holds weight.
Otherwise it is 100% over 5 yrs spread normally, but I like the one year bonus plan better...
Otherwise it is 100% over 5 yrs spread normally, but I like the one year bonus plan better...
If you opt for a 179 deduction it's not the weight of the vehicle, it's the rated weight.
The GVWR of 3/4 ton and over vehicles typically qualify for this.
Knowing the rules and limitations will keep everything legitimate. Get to know the rules for the 179 deduction and see if it meets your needs.
The GVWR of 3/4 ton and over vehicles typically qualify for this.
Knowing the rules and limitations will keep everything legitimate. Get to know the rules for the 179 deduction and see if it meets your needs.
What Mr Latone said, it's going to be the GVWR. So how much curb weight is as you roll out of the show room won't matter.
Just buy a tractor. I think they hold their values better. Sell it later for cash.
First things first... You shouldn't be paying cash for anything in the first place. Second, you need to call an accountant. You don't need the IRS breathing down your neck because you decided to claim something you "thought" was ok. Everything in this thread so far, is misconstrued from what the code really says. Call a finance company and do a sale/leaseback on the equipment, with a $1 buyout option. Then claim a deduction on any payments you make, as you make them, while having the cash to use now.
Mileage and weight limits are for mixed use vehicles... privately owned but sometimes used for business. Think "real estate agent". Also, do you know the ramifications of depreciating an assets value to the IRS? That means when you sell/trade it, you pay taxes on any value received/perceived thats over the depreciated value.
Now, I'm not an accountant, so call one of those... But be sure to learn about sale/leasebacks and how you can benefit from it.
Mileage and weight limits are for mixed use vehicles... privately owned but sometimes used for business. Think "real estate agent". Also, do you know the ramifications of depreciating an assets value to the IRS? That means when you sell/trade it, you pay taxes on any value received/perceived thats over the depreciated value.
Now, I'm not an accountant, so call one of those... But be sure to learn about sale/leasebacks and how you can benefit from it.
My post wasn't misconstrued nor did I offer any advice other than to follow the rules to which I posted a direct link.
The 179 deduction offers an advantage to being able to target business tax liability specifically to the year an asset is put in service.
It does not come without consequence as the business absorbs the tax liability over the length of the finance term.
If one finances the property over a period of time, the principle part of the payment will not be deductible nor depreciable as it was effectively expensed the year the asset was put in service. Other operating costs are still treated normally.
As far as a lease buyback, I don't know. But if you buy something for a dollar and sell it for for a gain, you are subject to tax on the gain. The benefit of the lease option therefore seems to be an alteration in the schedule to which the business can write off an asset (write off all of the payments made each year) . The 179 is similarly an alteration in the schedule.
More or better info anyone?
The 179 deduction offers an advantage to being able to target business tax liability specifically to the year an asset is put in service.
It does not come without consequence as the business absorbs the tax liability over the length of the finance term.
If one finances the property over a period of time, the principle part of the payment will not be deductible nor depreciable as it was effectively expensed the year the asset was put in service. Other operating costs are still treated normally.
As far as a lease buyback, I don't know. But if you buy something for a dollar and sell it for for a gain, you are subject to tax on the gain. The benefit of the lease option therefore seems to be an alteration in the schedule to which the business can write off an asset (write off all of the payments made each year) . The 179 is similarly an alteration in the schedule.
More or better info anyone?
Here we go.
SUV rules: You can take up to 25k in 179 depr if the GVWR is over 6000 lbs and under 14000 lbs. This depreciation is reduced by the % used for personal driving.
Once you elect to use 179 depr, you are locked into actual expense in future years. You cannot switch to mileage.
Some vehicles qualify for full Sec 179 deductions. Here's one example that looks like it applies to you.
Vehicles with: (1) a fully-enclosed driver's compartment / cargo area, (2) no seating at all behind the driver's seat, and (3) no body section protruding more than 30 inches ahead of the leading edge of the windshield. In other words, a classic cargo van.
You cannot lease a vehicle with a $1 payoff and expense all payments. The IRS considers this a purchase not a lease.
To reiterate, you must consider the personal/business percent in all calculations.
SUV rules: You can take up to 25k in 179 depr if the GVWR is over 6000 lbs and under 14000 lbs. This depreciation is reduced by the % used for personal driving.
Once you elect to use 179 depr, you are locked into actual expense in future years. You cannot switch to mileage.
Some vehicles qualify for full Sec 179 deductions. Here's one example that looks like it applies to you.
Vehicles with: (1) a fully-enclosed driver's compartment / cargo area, (2) no seating at all behind the driver's seat, and (3) no body section protruding more than 30 inches ahead of the leading edge of the windshield. In other words, a classic cargo van.
You cannot lease a vehicle with a $1 payoff and expense all payments. The IRS considers this a purchase not a lease.
To reiterate, you must consider the personal/business percent in all calculations.
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