Section 179 deduction - how does date of placing in service affect a heavy SUV (GVWR > 6000 lbs)

[HSTX]

Trying to understand whether you get more section 179 deduction now in Jun 2025 for placing a heavy SUV for business use (you are using it about half the year but you get 40% bonus depreciation) vs placing it in service Jan 2026 (you are using it for full year but you get only 20% bonus depreciation). 

Is this deduction governed by half year or mid quarter or mid month rule?

Do you get more deduction if you use the asset for full year vs part of the year?

Anyone can help?

Thank you

HSTX

[AmeliesUncle · Accepted solution]

No, the partial year or full year does not affect the amount of Section 179 that can be used.

Bonus Depreciation is also not affected by a partial year or full year, but as you pointed out, the percentage of Bonus Depreciation may vary from year to year (and the current bill in Congress may be changing the percentage).

Regular depreciation usually uses the half-year convention (sometimes the mid-quarter), regardless if it is used for a partial year or a full year.  If the mid-quarter rules apply, then that depends on the details.

[HSTX]

Thank you for taking the time to help me and clarify. Under what conditions would mid quarter depreciation apply for the SUV (GVWR > 6000 lbs and 100% business use)?

[JotikaT2]

The mid-quarter convention would apply if you had more than 40% of your cost basis for all heavy SUVs being placed in service during the last 3 months of the tax year.  Please see IRS Publication 546 for more details.  However, you are also limited on your section 179 as you are not allowed to claim more than $30,500 of the cost of your SUV.  Please see this link from the IRS for more details.

@HSTX