topic New Vehicle for Farm Use 60% Business Use first year then 30% thereafter in Business & farm

New Vehicle for Farm Use 60% Business Use first year then 30% thereafter

Will30747 — Thu, 17 Dec 2020 23:53:01 GMT

Hello I have purchased a new Pickup Truck (Over 6000lbs) that I expect to have 60% business use this year.

For years 2 through 5 I expect the percent of business use to be less than 50% most or all years.

How is the best way to handle?

I paid $34k for the truck and my AGI will be over $150+k this year and next

Thanks!

Re: New Vehicle for Farm Use 60% Business Use first year then 30% thereafter

M-MTax — Fri, 18 Dec 2020 00:58:55 GMT

If biz use drops below 50% you could have recapture. Car/truck expense

Re: New Vehicle for Farm Use 60% Business Use first year then 30% thereafter

Will30747 — Wed, 30 Dec 2020 21:52:05 GMT

Thanks

One follow-up question

Is it an option to complete a straight line depreciation form/worksheet and include the deduction amount in Turbo Tax under Schedule F - Miscellaneous Expenses.

This way I could go back to the standard mileage deduction in a future year once I fall below 50% business use threshold?

What do you think?

Thanks again

Re: New Vehicle for Farm Use 60% Business Use first year then 30% thereafter

M-MTax — Wed, 30 Dec 2020 22:32:53 GMT

If you don't use the standard mileage the first year you can't switch back to it. If you're going to drop lower than 50% then use the standard mileage from the start.

Re: New Vehicle for Farm Use 60% Business Use first year then 30% thereafter

AmeliesUncle — Wed, 30 Dec 2020 23:05:51 GMT

@Will30747 wrote:
Is it an option to complete a straight line depreciation form/worksheet and include the deduction amount in Turbo Tax under Schedule F - Miscellaneous Expenses.

This way I could go back to the standard mileage deduction in a future year once I fall below 50% business use threshold?

Yes.

No. As was mentioned, in order to use the Standard Mileage Rate, it must be used in the first year.

Re: New Vehicle for Farm Use 60% Business Use first year then 30% thereafter

Will30747 — Thu, 31 Dec 2020 19:23:45 GMT

Thanks

I thought if I used Actual Expense Method via Straight Line Depreciation starting with the first year I had the option to switch to the Standard Expense Method in any future year, yes/no?

Thanks Again

Re: New Vehicle for Farm Use 60% Business Use first year then 30% thereafter

AmeliesUncle — Thu, 31 Dec 2020 19:49:21 GMT

No. Some people misinterpret the rules that way, but the rules essentially say if you use the Actual Expenses in the first year, you can't use use the Standard Mileage Rate in future years.

Re: New Vehicle for Farm Use 60% Business Use first year then 30% thereafter

Will30747 — Mon, 04 Jan 2021 13:38:31 GMT

Thanks I got it; first year is a fork in the road with no going back!

With that put to bed if I still prefer to not pay back depreciation in future years. Is it an option to complete a straight line depreciation form/worksheet and include the deduction amount in Turbo Tax under Schedule F - Miscellaneous Expenses?

Thanks again!