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Lev, Tax Advisor
Category: Tax
Satisfied Customers: 28081
Experience:  Taxes, Immigration, Labor Relations
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I plan on buying a business vehicle and using the section 179

Customer Question

I plan on buying a business vehicle and using the section 179 deduction for it. Now, this is a Honda Civic (which I'm sure is under 6,000 lbs) and it cost about $16K. So, my question is, what amount would I be able to depreciate on this car in the first year? I believe it's $11,060 but please confirm by doing your own research. And does the car have to be new, used - and anything else I should keep in mind in regards XXXXX XXXXX reporting for this? Please be detailed in your response.
Submitted: 4 years ago.
Category: Tax
Expert:  Lev replied 4 years ago.


Hi and welcome to Just Answer!
Yes - your assumption is correct - there is a limit on depreciation deduction for cars - see IRS publication 463, page 22 - - that limit includes section 179 deduction - $11,060 limit applies to 2010-2011. The limit is adjusted for 2012 to $11,160. You will see that amount in updated publication 463 when it will be released for 2012.
However that limit is applied if the car is used 100% for business. If for instance the car is used 75% for business and 25% for personal purposes - the limit will be reduced accordingly.
You may purchase a new or used car - that is not an issue - but the car should be put in service in 2012. In additional - to qualify for section 179 deduction - the car should be used more than 50% for business.


Let me know if you need any help.

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