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I have question requesting taking 179 deduction for personal

owned vehicle.I am partner in...
I have question requesting taking 179 deduction for personal owned vehicle.I am partner in multiple member llc.The vehicle is SUV so it can qualify for 179 deduction plus 50 bonus deduction the value of vehicle is 60k.Some body told me it has to be titled in the name of llc.Another option is lease it back to llc and take the income and deduction on sch c.Is that the correct way and how I decide how much the lease payments are and also 179 deduction.I don't think the lease payments will make up the amount of 179 deduction.
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Answered in 38 minutes by:
10/21/2017
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 12,876
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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HI, MY NAME’S LANE - I hold a law degree (J.D.), with concentration in Tax Law, Estate law & Corporate law, an MBA in finance, a BBA, and CFP & CRPS (Chartered Retirement Plans Specialist) designations, as well - I’ve been providing financial, Social Security/Medicare, estate, corporate, non-profit, and tax advice 1986.

If you’ll please bear with me for a minute I’ll type up my initial response, and then we can go from there if you have further questions on this

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That the vehicle has to be in the name of the LLC is incorrect.

...

This only applies to S-Corps and C-Corps, NOT self employed individuals (Single member LLC members not electing Corporate taxation, Sole Proprietors, LLC's taxed as partnerships, actual partnerships).

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For self employed individuals it's only the USE of the vehicle that matters, (business use vs personal use).

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The §179 deduction is simply a way to accelerate the depreciation of a vehicle used in business all into the first year placed into service. Then for new vehicles the 50% bonus depreciation applies as well.

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BECAUSE this is about business use you will, of course, have to factor the deduction (just as you would with regular depreciation) with the % of business use.

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Let's say that you drive the vehicle 20,000 mile and that 15,000 of those were business miles.

...

The business section 179 deduction will be (if the vehicle is over 25000 GVRW) 25000 x .75 = 18750

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Customer reply replied 1 month ago
But where do I take the deduction.Because I get k-1 from llc.I cannot request the llc to Rembruise me the 40k like I would if was using standard mileage method.Llc cannot take the deduction because it's not titled in the llc name.
Customer reply replied 1 month ago
I cannot not take the deduction on form 2106 because that for employees

When you are a partner in a business, you will receive an informational return from the partnership called a K-1. The K-1 contains your share of the partnership's profits or losses and is reported on the Schedule E form.

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If you have unreimbursed expenses from a partnership in which you are an active participant, the Internal Revenue Service requires you to report them in their own line in column "h" of Line 28 of the Schedule E form -- separate from the entry corresponding to your K-1.

...

The IRS also requires you to label them "UPE" for unreimbursed partnership expense

Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 12,876
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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Customer reply replied 1 month ago
For example I have BMW SUV cost 60k with 70% business use.Total veh expenses 10,000. X 70%
35k in depreciation7k cost plus depreciation expense of 35kSo i would put upe of 35k on sch eWould I need to attach form to my individual tax return show what the upe was for.

Yes, the K-1 flows through the schedule E to line 17 of the 1040 anyway. You'll just be adding this to the schedule E.

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Lane
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
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