Jet Ski Business write off

[ypereira95]

I am purchasing a Jet ski for my start up business, to deduct the cost would I have to use section 179 or could it be write it off under business expesne?

[Mike9241]

tell us more about your business and why the need for a jet ski? has the business already started? what will the cost be?   will the profits of the business exceed the cost of the ski or will there be a loss for the business in the year of purchase? 

[ypereira95]

The business is a Jet Ski rental business (I'm in Florida), I am wrapping some minor items up but the purchase of the Jet Ski will be in the next week. There will be a loss the first year as its starting in December.

[ypereira95]

The business is a Jet Ski rental business (I'm in Florida), I am wrapping some minor items up but the purchase of the Jet Ski will be in the next week. There will be a loss the first year as its starting in December.

[VolvoGirl]

You need to add it as an ASSET and depreciate it over time.  You may be able to take the special 179 deduction.  

[Opus 17]

Assets must be listed and depreciated over their expected useful life.  You may qualify for section 179 depreciation which allows you to deduct the cost more rapidly, but it is still considered depreciation and not an expense.

There is a safe harbor that allows small business owners to expense certain depreciable items if the cost is less than $2500, but I don't think a PWC will fall under that limit.

[Anonymous_]

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@ypereira95 wrote:

There will be a loss the first year as its starting in December.

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Per Section 179(b)(3), the cost of the asset will not qualify for Section 179 treatment if you have a loss.

The amount of the Section 179 deduction is limited to the aggregate amount of taxable income for the taxable year which is derived from the active conduct of any trade or business during the taxable year (note that this would include your W-2 income, if any).

[Anonymous_ · Accepted solution]

Note that the asset may qualify for bonus depreciation under Section 168(k).

See https://www.law.cornell.edu/uscode/text/26/168

See also https://answerconnect.cch.com/topic/4aeb16f87c6b1000a0e390b11c18c90202/bonus-depreciation-or-first-y...