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Arthur Rubin
Arthur Rubin, Tax Preparer
Category: Tax
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Experience:  22 years of tax preparation experience, including individual, trust, and estate returns.
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Im using Turbo Tax, and Im entering in the cost of my wife

Resolved Question:

I'm using Turbo Tax, and I'm entering in the cost of my wife's SUV (She's a real estate agent). We purchased the over 6,000lb (Denali XL GMC) vehicle for 46,999 in June. It calc'd out based on her miles that she uses is 90% for business, so my Section 179 deduction for 2010 is 42,299 (46,999*90%).

When I run the check, it comes back and says that Sec 179-1 deduction is to big on schedule C... I don't get it, it is 90% of the cost of the vehicle?? HELP?? This is the only thing that Turbo Tax is telling me to review...

Thanks!
Submitted: 3 years ago.
Category: Tax
Expert:  Arthur Rubin replied 3 years ago.

Arthur Rubin :

Section 179 deductions are limited to the net income of the business. Perhaps that's the limitation Turbo Tax is reporting.

Customer: I don't understand. I wrote off assets against my rental properties and have a net loss? Are you saying I can only take as much section179 for this vehicle that takes my wifes business income to $0.?
Arthur Rubin :

Section 179 deductions are (1) not allowable for a rental, and (2) limited to the "profits" of a business. (Some of the special depreciation writeoffs, including the currently proposed 100%, are allowable for rentals.)

Customer:

Isn't the answer that the max depreciation I can take is limited to $25,000 for this vehicle, therefore I must reduce the $42,299 down to a max of $25,000? I dont' need a reply, I just don't think that I got the answer I was looking for, as I had to look it up my self and figure out that the max depreciation I could take was $25,000 for this vehicle that is over 6,000lbs.. I'm willing to pay you a little bit, but don't feel I got the correct answer. How about $15 for your time.

Arthur Rubin :

You're absolutely correct. My apologies.

Arthur Rubin :

You may need to recheck to see if the section 179 deduction is limited to $25K or 90% of $25K.

Arthur Rubin :

And, finally, I don't think there's any way for you to pay me less than the amount offered, through Just Answer. I'll see if the management is willing to adjust the value of the question down. You'll be informed if they are.

Arthur Rubin :

OK, the cost has been reduced to $15.

Arthur Rubin, Tax Preparer
Category: Tax
Satisfied Customers: 1278
Experience: 22 years of tax preparation experience, including individual, trust, and estate returns.
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Arthur Rubin
Arthur Rubin
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22 years of tax preparation experience, including individual, trust, and estate returns.