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geedubya55, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 358
Experience:  17 years experience in business and individual taxation specializing in small business and farming
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Can I take a 100 percent write off for my business on a used

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Can I take a 100 percent write off for my business on a used SUV with a gross pay load of 6000lbs. or does it have to be a new SUV?

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If the vehicle is used 100% for business purposes, you can take a direct write-off of up to $25,000 for a vehicle with a GVW over 6000 lbs. Section 179 of the internal revenue code allows the direct write-off only in the year the vehicle is placed in service. If the vehicle costs more than $25,000, then the excess over that amount is depreciated over 5 years.


If your vehicle is used less than 100% for business, you can only take a percentage of the $25,000. If it is less than 50% business use, you can not take any section 179 expense.


Since the vehicle is used, it does not qualify for bonus depreciation.


Customer: replied 5 years ago.
So only a NEW SUV with a GVW of 6000 Lbs. would qualify for 100% Bonus Depriciation, but a USED SUV that I pay $70,000.00 for I could only write off $25,000.00 this year?
For 100% bonus depreciation, it must be new, and there is no GVW requirement. For the Section 179 deduction, it can be used, but it must be over 6,000 lb. GVW to take section 179 and then it is limited to $25,000. If you pay $70,000 for the vehicle, and take section 179 of $25,000 this year, you would still have depreciable basis of $45,000 on which you would get the first year regular depreciation in addition to the section 179 expense. That deduction would be an additional $9,000 if you use the half year convention. If you are required to use the mid quarter convention, the regular depreciation deduction would be $1,687.50. So you could actually write off up to $34,000 of the $70,000 cost in the year of purchase.
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