topic Claimed section 179 on 100% Bus Vehicle - Used it for 5 full years- how to get rid of it without paying taxes in Deductions & credits

Claimed section 179 on 100% Bus Vehicle - Used it for 5 full years- how to get rid of it without paying taxes

Cookfest007 — Tue, 10 Mar 2026 06:41:04 GMT

Claimed section 179 on 100% Business Use Vehicle - Used it for 5 full years- how to get rid of it without paying taxes?

Re: Claimed section 179 on 100% Bus Vehicle - Used it for 5 full years- how to get rid of it without paying taxes

Mike9241 — Tue, 29 Nov 2022 06:46:59 GMT

since any sale or exchange will result in taxable income the only way is to donate to charity or make a gift

there are rules that must be followed

see this link - A donor's guide to vehicle donation

https://www.irs.gov/pub/irs-pdf/p4303.pdf

any gift must not be a disguised sale

Re: Claimed section 179 on 100% Bus Vehicle - Used it for 5 full years- how to get rid of it without paying taxes

Critter-3 — Tue, 29 Nov 2022 22:12:30 GMT

If the asset is fully depreciated then the adjusted cost basis is zero. So if you sell/trade it for anything more than zero you have taxable capital gain event but not recaptured depreciation since you kept it the full 5 years.

Re: Claimed section 179 on 100% Bus Vehicle - Used it for 5 full years- how to get rid of it without paying taxes

Carl — Wed, 30 Nov 2022 02:09:25 GMT

Seems darn near everybody thinks that depreciation is a permanent deduction. Then they are surprised years later when they sell the depreciated asset, that it's not a permanent deduction.

If you took 100% depreciation the first year, then your cost basis on the asset is zero in the tax year you sell it or trade it in. If sold, any money received for the asset is reportable/taxable income. If traded in, any trade in amount you were compensated for the new vehicle is reportable. It's kinda like your cost basis of the new vehicle is reduced by the trade-in value.

Re: Claimed section 179 on 100% Bus Vehicle - Used it for 5 full years- how to get rid of it without paying taxes

Cookfest007 — Wed, 30 Nov 2022 03:48:38 GMT

Understood. Thanks.

Do you know the reasoning behind why individuals would buy a vehicle over 6000lbs take the section 179 depreciation to lower their taxable income, than sell the vehicle with an adjusted basis of 0, for a taxable gain? Is the reason because they will be taxed at a lower more favorable capital gains rate?