My husband and I own an LLC. We purchased a new van in Dec for the business. If I take full value for 2016 under section 179. should I enter same expense amt for state?

[pinva]

My husband and I created an LLC to manage our residential rental property in 2015.  We purchased a new van in December of 2016 for the business and live in VA.  The van will be used 80-90%% for business use. If I deduct the full value of the item for 2016 under section 179, should I enter the same expense amount for VA?

[Rick19744]

I recommend you consult with a tax professional on this matter if you want to take advantage of this.

You cannot claim the section 179 deduction for property held to produce rental income. This would include any rental assets along with capital improvements.

To qualify for the section 179 deduction, your property must have been acquired for use in your trade or business. Property you acquire only for the production of income, such as investment property, rental property (if renting property is not your trade or business).

So, unless you qualify as a real estate professional, which determining this is beyond the scope of this forum, you do not qualify for Section 179 at the federal level.  Just to address the state component of your question, Virginia conforms to the federal rules regarding Section 179.

See Chapter 2 of the attached link to IRS Publication 946:

https://www.irs.gov/pub/irs-pdf/p946.pdf

[pinva]

Thank you for the feedback.