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I own a small business and purchased a used car for the

business. Am I able to...
I own a small business and purchased a used car for the business. Am I able to deduct the purchase of the used vehicle?
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Answered in 3 minutes by:
1/19/2018
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 14,910
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, to clients on three continents, since 1986.

Bear with me a moment while I type up my response. Then if you have further questions we can go from there

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Yes, you can use section 179 to accelerate the depreciation that would normally have to be taken over five years on a vehicle all into the first year.

....

It's only the additional bonus depreciation that requires that the vehicle be a new vehicle

...

Vehicles used in your businesses qualify - but certain passenger vehicles have a total depreciation deduction limitation of $11,060, while other vehicles that by their nature are not likely to be used more than a minimal amount for personal purposes qualify for full Section 179 deduction.

...

And if the vehicle is an SUV or crossover with Gross Vehicle Weight Rating (GVRW) of 6000 lbs or more the limit is 25,000

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Exceptions to the 11,600/2,5000 limit include the following vehicles:

  • Ambulance or hearse used specifically in your business;
  • Taxis, transport vans, and other vehicles used to specifically transport people or property for hire;
  • Qualified non-personal use vehicles specifically modified for business (i.e. van without seating behind driver, permanent shelving installed, and exterior painted with company’s name).
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Please let me know if you have ANY questions at all, before rating me.

If this has helped, and you DON’T have other questions … I'd appreciate a positive rating, using the stars on your screen, and then clicking “submit"– That’s the only way I’ll be credited for the work.

But again, if you need more on this, or if I've not understood your question correctly, please let me know.

Lane

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Customer reply replied 7 months ago
Does it matter that the vehicle is used, not new?

No. Not for the basic 179 deduction.

...

There IS an ADDITIONAL amount above the limit (11,600 for cars and trucks, 25000 for SUV's) that can be deducted, called bonus depreciation.

...

Only the bonus (extra) depreciation has the requirement that the vehicle be new.

...

  • A used car or passenger truck generates an 11,600 deduction (with any remaining cost depreciated regular way in the following years
  • A used SUV or crossover over 600 lbs GVRW generates a 25,000 deduction with any remaining cost being depreciated regular way
  • A used vehicle that meets one of the exceptions above is 100% deductible
Lane
Lane, JD, CFP, MBA, CRPS
Category: Finance
Satisfied Customers: 14,910
Experience: Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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