@jrze wrote:
Thank you. It is a 6500 lb SUV purchased new for approx. $45,000 and it has been used for transporting packages for mailing for an online sales business.
Okay, over 6000 pounds mean it is not subject to the Luxury Limits. It sounds like it should have been subject to the $25,000 limit for Section 179 (prorated, based on business/personal use). And I got the impression the vehicle has also been used for some personal use, which makes it "Listed Property".
As "Listed Property", when the vehicle drops to 50% or less for the tax year, any accelerated depreciation (including 179) is recalculated using Straight-Line depreciation, and the 'excess' is "recaptured".
If the vehicle was always used 100% for business, this is how depreciation would have been calculated using Straight-Line:
2017: 10% of cost
2018: 20% of cost
2019: 20% of cost
2020: 20% of cost
2021: 20% of cost
2022: 10% of cost
So if business percentage drops to 50% or less for tax year 2022, it is recalculated using straight line. But because 100% of the cost would already be depreciated in 2022, there is nothing to recalculate.
It is bit more complicated due to personal use, but that is the simplified version of it.
