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Section 179
Hello
I am entering the information for a new work vehicle we acquired in August of 2020 which we are leasing.
The Section 179 option isn't coming up for me to enter the information to take advantage of this tax saver.
Is there something wrong with TurboTax that it isn't populating, or am I missing something? It is a truck over 6,000 lbs, and that's the option I've clicked.
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Business & farm
Please see this LINK for more information.
Buy or lease?
You can use the either the standard mileage or actual expenses method for a leased vehicle. However, if you use the standard mileage rate, you cannot switch to the actual expense method in a later year.
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- If you use the standard mileage rate for a leased vehicle, the lease payment amount is not deductible.
- If you use the actual expenses method, leased vehicles are not depreciated. Instead, the business portion of the lease payment is deducted.
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Business & farm
I'm reading on other places that that Section 179 can be used for leased vehicles as well. Where might I find the actual rule?
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Business & farm
The actual rule is in Section 179 of the Tax Code. The easier-to-read version is in IRS Publication 946:
What Property Qualifies?
To qualify for the section 179 deduction, your property must meet all the following requirements.
It must be eligible property.
It must be acquired for business use.
It must have been acquired by purchase.
It must not be property described later under What Property Does Not Qualify .
https://www.irs.gov/publications/p946#idm[phone number removed]952
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Business & farm
Always go to the IRS. There is much unreliable information on the internet. I found two articles that said it was allowed.
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Business & farm
The thing that confuses things is that some places call an Installment Sale a "lease".
In some cases some places call a situation where you make a monthly payment then have a "buyout" for $1, they call it a "lease". But at least for tax purposes, that situation is NOT a lease, it is a purchase (which would qualify for Section 179).