Have a Tax Question? Ask a Tax Expert
Thanks for using JustAnswer.com!1.) You can deduct section 179 deduction expense regardless of whether the vehicle is titled to you or your LLC. 2.) Section 179 depreciation allows you to deduct up to the entire purchase price of the vehicle in the first year that you own the vehicle -- even if the vehicle is bought in December. If the vehicle is an SUV, a car, or a truck that is under 6,000 lbs Gross Vehicle Weight (GVW), the deduction is limited. a.) 25,000 dollars for SUV over 6,000 lbs GVWb.) 11,060 dollars for passenger carsc.) 1,160 dollars for vans and trucks under 6,000 lbs GVW3.) If the vehicle either goes below 50% business use or you stop using the vehicle for business before 5 years, you will have to recapture the depreciation into income when either of the events mentioned earlier occur.Business use is tracked by mileage logs. You will need to maintain a mileage log of all the business miles driven through out the year.If there are other questions, please reply to my answer so that may assist you further. If this answers your question, please rate my performance between OK and Excellent Service so that I may be paid. Thanks for your business.
Thanks for your answer! How would I go about recapturing the depreciation into income. For instance if I purchase a $25,000 SUV and depreciate the entire amount will I then have to claim $25,000 in income the following year if I no longer use it for business purposes. Also, if next year if I get hired on as an actual employee and work from my home office 50% of the time and work from an actual company office location will I be able to classify that as business mileage if I no longer have an llc. Thanks again!
Basically, you refigure what the depreciation should have been without section 179, subtract it from the 179 amount that was deducted, and include the difference in to income.
Here is an example from IRS publication 946:
Example 1. Shirley Butler, a calendar year taxpayer, bought and placed in service on February 12, 1998, an item of 3-year property costing $5,000. She elected to expense the property under section 179. Since she deducted the full cost of the property, she did not claim any depreciation for it. She used the property only for business in 1998 and 1999.
In 2000, Shirley used the property only for personal use. Because of the change from business to personal use, she must recapture the benefit she got from the section 179 deduction claimed in 1998. Shirley figures her recapture amount as follows.