topic Re: Used car in Self employed

Used car

RAKB02 — Wed, 27 Oct 2021 16:11:56 GMT

I purchased an old suv so I can go and buy product to resell. Can I use sec 179 to write off the purchase?

Re: Used car

David_EA — Wed, 27 Oct 2021 16:13:45 GMT

Yes, as long as a vehicle is new-to-you and not purchased from a family member, you should be able to claim all or part of the vehicle using the Section 179 deduction.

Re: Used car

RossP88 — Wed, 27 Oct 2021 18:49:42 GMT

Hi! I am a TurboTax Live CPA. You will be only able to use Section 179 for new property to the business so it is possible to use it if you acquire a used vehicle. That being said, given the lower basis generally of a used vehicle it would be wise to make sure that 179 will result in the biggest tax savings since you would have to forgo the standard mileage rate.

Re: Used car

RAKB02 — Wed, 27 Oct 2021 16:14:38 GMT

Thanks David.

Re: Used car

RAKB02 — Wed, 27 Oct 2021 16:15:41 GMT

Wait another tax expert said yes I can and now you say no. @RossP88 @David_EA Which is it?

Re: Used car

David_EA — Wed, 27 Oct 2021 16:28:58 GMT

Generally speaking, the Section 179 tax deduction applies to passenger vehicles, heavy SUVs, trucks and vans that are used at least 50% of the time for business-related purposes. For example, a pool cleaning business can deduct the purchase price of a new pickup truck that is used to get to and from customers’ homes.

Millions of small businesses and solo business owners use small vehicles on a daily basis. These include passenger cars, crossovers, and small utility trucks. Small vehicles that weigh under 6,000 pounds have a Section 179 deduction limit of $10,100 in the first year they are used, and $18,100 with bonus depreciation.

If the vehicle is not used 100% of the time for business, the deduction allowance is reduced proportionately. For example, if a florist purchases a van that is used 50% for business purposes, the limit is $5,050 ($10,100 x .50).

Re: Used car

HollyP — Wed, 27 Oct 2021 17:34:09 GMT

@RAKB02 To clarify further on what @David_EA and @RossP88 said above, the vehicle just must be "new to you" or new to your business to qualify for Sec 179 treatment. For more details please see, What is a Section 179 deduction?