Section 179

[kkossow]

Thank you very much. I understand the depreciation in general but what about the section 179 deduction?

[ThomasM125]

Section 179 is an election that allows you to deduct depreciation up to an amount equal to the cost of a business asset in the year you purchase the asset. You must use the asset more than 50% in your business, which comes into play when you have a vehicle that is used partly for business and partly for personal use. You can only deduct the 179 depreciation allowance to the extent you have net income in the business in the current year. Any unused allowance can be carried over to future years.

If you take a section 179 depreciation allowance and convert the asset to personal use before the expiration of the normal depreciation period allowed for the asset, you will have to recapture (add back to income) a portion of the allowance. You can learn more here:  Section 179 Depreciation

[kkossow]

Thank you very much. However, my question is whether the Section 179 deduction is available for a vehicle purchased in September 2023, and immediately placed in service at that time?  The vehicle is used 90% for business, yet TurboTax is calculating the percentage at less than 50% because the vehicle was purchased in September. That appears to be a glitch re the software. For example, if the vehicle was used 5000 miles in 2023, and 4500 miles was business, the business use percentage should be 90% However, in this case, TurboTax is calculating the percentage at roughly 25% because the vehicle was only in service for roughly 3 months. This prevents the Section 179 deduction. 

[ThomasM125]

I made an entry based on what you said and I got the 90% business use. Here are my screen shots so  you can compare to yours. If you entered anything differently try changing to my entries to see if that resolves your issue:

[kkossow]

Thank you very much ... I don't know why my software was glitching.