- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
How to handle an idle business vehicle and the 4 vehicle limitation
I bought a truck for 100% business use 20 years ago. It is fully depreciated. For seven years now it has been sitting idle, not running and needing repairs. Last year, during the pandemic, I spent several hundred dollars on repair parts trying to get it running. But this year business picked up and I didn't have any time to work on it and spent no money on it. I have two other work trucks. I also use my personal vehicle for some business trips. My problem is with the limit of four business vehicles (my personal vehicle is counted as one of the four) before it is considered a fleet.
Now I bought an inexpensive used truck for business. It is to replace one of the two running business trucks that I retired to personal use. There are a number of factors to consider:
* If I didn't use the broken truck all year or spend any money on it, can I remove it from my list of vehicles (to keep my list of vehicles at just 4)? If so, when and if I am able to get it running to either use for the business (or most likely, to sell), will I need to add it back into the list of vehicles so that I can properly mark it "disposed of" and record the selling price?
*The replacement truck I bought for 100% business use . . . I purchased it in January 2021 but didn't put it into service until January 2022. However, I did purchase repair parts in December 2021 to get it ready for service. Should I just leave the purchase off of the 2021 books in order to keep my vehicle "fleet" at 4 (keeping the broken truck in my list of 4)? If so, can I save the cost of the truck for 2022 but put the December repair parts in with my general 2021 vehicle repair expenses?
*I retired a truck to personal use in January 2022 and put the truck mentioned above into business service in January 2022 to replace it. So even if I wait and add the recently purchased truck to next year's books, I will still be faced next year with the dilemma of having an extra truck in the list (because of the old, broken truck).
So, in other words, I have never had more than 4 WORKING vehicles available at a time, but technically, in 2022 there were 6 different vehicles that I own (but didn't necessarily use).
I am so confused as to how best handle this on my 2021 taxes. Any clarification or advice would be most welcome!!!
Do you have an Intuit account?
You'll need to sign in or create an account to connect with an expert.
- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
How to handle an idle business vehicle and the 4 vehicle limitation
Did you have 5 vehicles working at the same moment in time at any point during the year, if yes, then you have more than 4 working vehicles. If you never had more than 4 operating at any one time, you are fine with the 4 vehicles. You can have a long list of vehicles, different types of companies use different types of vehicles depending on the job. The length of the list does not matter, only how many operate at a time.
**Mark the post that answers your question by clicking on "Mark as Best Answer"
Still have questions?
Make a post