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New Member
posted May 31, 2019 6:19:33 PM

Section 179 heavy duty SUV. I'm looking to purchase a 2004 hummer h2 for our business first year in and setup as an LLC. Total cost 21600 what would be write off?

I'm just trying to get an idea based on last years allowances

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1 Best answer
Level 13
May 31, 2019 6:19:42 PM

The linked article by SJ is a good summary.  Things to keep in mind:

  • Since the vehicle is not original use, it does not qualify for bonus depreciation.
  • The vehicle does qualify for the maximum Section 179 for heavy vehicles of $25,000.  So this means you could expense the entire amount in the initial year.
  • While the vehicle does qualify for the $25,000 Section 179, note the discussion in the article on taxable income limitation.  If you do not have sufficient taxable income from your trade or business, any Section 179 not allowed is carried over
  • The state may limit your Section 179 further

9 Replies
Level 15
May 31, 2019 6:19:35 PM

"our" business.... Is this a Partnership?

New Member
May 31, 2019 6:19:37 PM

It's an llc under my wife and I name

Level 15
May 31, 2019 6:19:37 PM

What state do you live in ?

New Member
May 31, 2019 6:19:39 PM

New Jersey

Level 15
May 31, 2019 6:19:41 PM

If this is your first foray into a partnership  I HIGHLY suggest you sit down with a qualified professional to get educated on all the rules you must follow.  Also you may want to get the first tax return done professionally as well  because messing up those can cost you big time later.  For instance ... did you know a partnership return has a due date of 3/15  not  4/15 ?

Level 13
May 31, 2019 6:19:42 PM

The linked article by SJ is a good summary.  Things to keep in mind:

  • Since the vehicle is not original use, it does not qualify for bonus depreciation.
  • The vehicle does qualify for the maximum Section 179 for heavy vehicles of $25,000.  So this means you could expense the entire amount in the initial year.
  • While the vehicle does qualify for the $25,000 Section 179, note the discussion in the article on taxable income limitation.  If you do not have sufficient taxable income from your trade or business, any Section 179 not allowed is carried over
  • The state may limit your Section 179 further

Level 15
May 31, 2019 6:19:45 PM

http://www.marketwatch.com/story/heres-a-way-for-small-business-to-save-on-taxes-buy-a-heavy-suv-or-...

Level 15
May 31, 2019 6:19:46 PM

If an LLC is owned by husband and wife in a non-community property state (such as NJ), the LLC should file as a Partnership. LLCs owned by a husband and wife are not eligible to be “qualified joint ventures” (which can elect not be treated as partnerships) because they are state law entities.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Election-for-Husband-and-Wife-Unincorporated-Businesses

If the company truly owns the car, then it must be titled in the company’s name. This might be a challenge with car loans and leases, but for the company to claim it as an asset and subsequent expenses the title needs to be in the LLC's name.  To take Section 179 depreciation, the vehicle must have a greater than 50% business use

Level 15
May 31, 2019 6:19:47 PM

Also see this re Partnerships:
<a rel="nofollow" target="_blank" href="https://www.irs.gov/businesses/small-businesses-self-employed/partnerships">https://www.irs.gov/businesses/small-businesses-self-employed/partnerships</a>