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100% first year bonus depreciation question
Posted on 11/14/18 at 8:20 am
Posted on 11/14/18 at 8:20 am
I have a couple of investment properties in nola and 1 in ms. I live in Philadelphia pa. I drive down twice a year to do maintenance etc...
say I buy a 60k SUV or truck on Dec 31st and drive it to la to do maintenance that day... can I take the 100% deduction for 2018 since 100% of its use for 2018 was for business related activities?
say I buy a 60k SUV or truck on Dec 31st and drive it to la to do maintenance that day... can I take the 100% deduction for 2018 since 100% of its use for 2018 was for business related activities?
4
Posted on 11/14/18 at 8:50 am to birdieman
(no message)
This post was edited on 12/21/21 at 11:42 am
Posted on 11/14/18 at 12:07 pm to XanderCrews
Even if I don't use it for business related travel past Dec 31st?
Posted on 11/14/18 at 12:25 pm to birdieman
Vehicles depreciate over 5 years for the IRS. If you can buy a $60k vehicle, then ask your CPA as you should have one.
Posted on 11/14/18 at 12:33 pm to baldona
I was just told this by our cpa:
"In order for a business to deduct an expense it must be "ordinary and necessary" Purchasing a car for 1 day of use is neither ordinary or necessary, and would be thrown out upon review."
"In order for a business to deduct an expense it must be "ordinary and necessary" Purchasing a car for 1 day of use is neither ordinary or necessary, and would be thrown out upon review."
This post was edited on 11/14/18 at 12:37 pm
Posted on 11/14/18 at 1:01 pm to baldona
quote:
Vehicles depreciate over 5 years for the IRS.
They don't have to be depreciated over 5 years. There are several methods that can be used.
Posted on 11/14/18 at 1:01 pm to birdieman
quote:
I was just told this by our cpa:
"In order for a business to deduct an expense it must be "ordinary and necessary" Purchasing a car for 1 day of use is neither ordinary or necessary, and would be thrown out upon review."
He's right
Posted on 11/14/18 at 1:18 pm to birdieman
quote:The IRS has plenty of loopholes but they cover as many bases as possible
was just told this by our cpa:
"In order for a business to deduct an expense it must be "ordinary and necessary" Purchasing a car for 1 day of use is neither ordinary or necessary, and would be thrown out upon review."
Posted on 11/14/18 at 1:22 pm to castorinho
quote:
The IRS has plenty of loopholes but they cover as many bases as possible
I'm failing to see how buying a vehicle, expending against business income, and subsequently never using it for business is a "loophole"
Posted on 11/14/18 at 1:26 pm to Mingo Was His NameO
I didn't say it was...
Posted on 11/14/18 at 4:31 pm to birdieman
You can do it.
The question is whether you get audited.
The question is whether you get audited.
Posted on 11/15/18 at 12:00 am to birdieman
quote:Well apparently you could previously deduct a maximum $25,000 for SUVs, then deduct an additional 50% from the remaining $35,000 under a bonus depreciation, and then use one of the mid-quarter (4th quarter) 5 year MACRD methods to depreciate the remaining $17,500.
say I buy a 60k SUV or truck on Dec 31st and drive it to la to do maintenance that day... can I take the 100% deduction for 2018 since 100% of its use for 2018 was for business related activities?
But now it looks like instead of the 50% bonus depreciation, it is a 100% bonus depreciation for a property placed in service in 2018, and it can be new or used. So therefore, it appears you can deduct the full 100%, so long as it doesn’t exceed your taxable income.
Posted on 11/15/18 at 6:48 am to buckeye_vol
quote:
So therefore, it appears you can deduct the full 100%, so long as it doesn’t exceed your taxable income.
You're only limited to income on 179. Not bonus.
The problem is I think he's trying to buy a personal vehicle on Dec 31st. Use it for the business that day. Then on Jan 1, start using it for personal. Which ain't gonna fly.
Posted on 11/15/18 at 7:42 am to birdieman
quote:
Purchasing a car for 1 day of use is neither ordinary or necessary, and would be thrown out upon review.
In other words, he won't sign the return himself but unless you are audited you'll get away with it.
Posted on 11/15/18 at 9:21 am to birdieman
You would have to recapture it in 2019 when your business use falls to zero percent.
Posted on 11/15/18 at 11:08 am to LSUFanHouston
I'm not going to do this at all. I was just reading about this 100% bonus and was curious if it were possible.
Im sure my CPA wife woulda caught on to my ingenious master plan to game the system and kick me in the nuts anyway.
Im sure my CPA wife woulda caught on to my ingenious master plan to game the system and kick me in the nuts anyway.
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