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Alexander Haraczka
Alexander Haraczka,
Category: Tax
Satisfied Customers: 23
Experience:  Supervisor at Cummings, Lamont & McNamee, PA
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I have a business and am looking to buy a used SUV (because

Customer Question

I have a business and am looking to buy a used SUV (because we need a car) to get the section 179 depreciation. I was informed by my cpa that they just passed (or are about to) a tax bill that now allows for bonus depreciation on over 6000lbs SUVs. I am looking at a used $50,000 SUV and my CPA is telling me that since its "new to me" that I can get the bonus depreciation. Would this really be the case given that its a used SUV? I always thought it had to be new to qualify for the bonus depreciation.
Submitted: 11 months ago.
Category: Tax
Customer: replied 11 months ago.
the question is that if my net income from my business is $90k for the year, and then if I buy this used SUV for $50,000 (after sales tax, etc), then if the SUV qualifies for bonus depreciation would I be able to write off $25,000 + another $25,000 = $50,000 total write off for 2015, bringing my business income down to $40,000 for the year? Would this be how the new law will work?
Customer: replied 11 months ago.
The above example is assuming I use the SUV 100% for business (I wont in real life, but just for example sake to make it easier I am assuming 100% business use). Main thing I want to find out is will this bonus depreciation be able to be used on used SUVs as well.
Expert:  Alexander Haraczka replied 11 months ago.

Good evening and thank you for posing your question regarding bonus depreciation on an SUV. My name is Alexander; I'm an EA, and am happy to assist you.

Section 179 is available on used assets that are "new to you"; however, Sec. 168(k) Bonus Depreciation is eligible only for new assets (new to you doesn't count if the asset was previously owned). Therefore, assuming the tax extender package is approved tomorrow, you would be able to deduct the $25,000 for Sec. 179 (in your example of 100% business use); however, there would be no Sec. 168(k) bonus deduction available.

Please let me know if any part of my answer was unclear; if you're satisfied that you've received a prompt and professional response to your question (bonus depreciation and Sec. 179 on a used SUV), please be sure to rate me as soon as you're able. Thank you,