Tax

Have a tax question? Ask a tax Expert

Ask an Expert,
Get an Answer ASAP!

This answer was rated:

I am an owner of an LLC. I will take distributions through a…

I am an owner...

I am an owner of an LLC. I will take distributions through a schedule K1 pass through. I also receive W2 income from an employer and 1099 income. Will I be able to fully depreciate a qualifying truck that I purchase in my own name using a section 179 and it offset my taxable income from my W2 and 1099 income? The LLC K1 will probably not have income to report this year in the form of distributions.

Accountant's Assistant: The Accountant will know how to help. Is there anything else the Accountant should be aware of?

I don't believe so.

Show More
Show Less
Ask Your Own Tax Question
Answered in 58 minutes by:
11/7/2017
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,125
Experience: 35 years tax experience, including four years at a Big 4 firm.
Verified

Hi from Just Answer. I'm PDtax, and can assist.

Ask Your Own Tax Question
Customer reply replied 9 months ago
am an owner of an LLC. I will take distributions through a schedule K1 pass through. I also receive W2 income from an employer and 1099 income. Will I be able to fully depreciate a qualifying truck that I purchase in my own name using a section 179 and it offset my taxable income from my W2 and1099 income? The LLC K1 will probably not have income to report this year in the form of distributions.
Customer reply replied 9 months ago
I didn't actually get an answer in your initial response.

I had to think about your scenario. I can think of a number of ways to make this work, so I'll start by saying it depends.

Ask Your Own Tax Question
Customer reply replied 9 months ago
Can you go into detail on "depends?"

The depreciation rules refer to placing an asset in service in a trade or business. You did neither. You personally pwn a truck. But you could contribute the truck to your LLC and use it as a business asset.

That's where it gets interesting. Since you own an LLC, and likely financed the asset personally, like most LLC owners. It's in your name, and your insurance.

You're stuck unless you place it in service, either but transferring the asset into the LLC our use it yourself in a trade or business.

To avoid the sales tax and insurance issues, I suggest you rent it to your LLC. With a lease, and fair rent. Then you get a deduction for the depreciation that you want.

There are some details to this, but that's not needed here. The lease works, and you have placed your asset in service.

Thanks for asking at just answer. Positive feedback is appreciated. I'm PDtax.

Ask Your Own Tax Question
Customer reply replied 9 months ago
34;You're stuck unless you place it in service, either but transferring the asset into the LLC our use it yourself in a trade or business."If I purchase the asset without leasing or renting to the LLC, but I do use it in myself in the trade or business would I be able to fully depreciate on my personal taxes?
Customer reply replied 9 months ago
Positive feedback will be left. Thank you

I'm going to expand my answer to what I consider a stretch of the asset rules. An LLC is a disregarded entity for IRS reporting purposes. You can elect other entity treatment, but it is typically a schedule c business. As such, you can buy the asset personally and consider it a business asset.

I recommend the lease arrangement as it is more traditional, but you could simply test the truck as an LLC asset. I suggest business insurance, since you are blurring the line between business and personal assets.

Example: accident in truck on the way to a client. Do you get LLC protection? The tax treatment works, but it should have the trappings if a business asset.

Thanks for the positive feedback.

PDtax

Ask Your Own Tax Question
Customer reply replied 9 months ago
I if purchased the truck through the LLC, insured it through the LLC and put it into service, could I then fully depreciate the price of the truck to help reduce my personal taxable income through W2 and my 1099?Thank you

Yes.

PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,125
Experience: 35 years tax experience, including four years at a Big 4 firm.
Verified
PDtax and 87 other Tax Specialists are ready to help you
Ask your own question now
Was this answer helpful?

How JustAnswer works

step-image
Describe your issueThe assistant will guide you
step-image
Chat 1:1 with a tax professionalLicensed Experts are available 24/7
step-image
100% satisfaction guaranteeGet all the answers you need
Ask PDtax Your Own Question
PDtax
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 5,125
5,125 Satisfied Customers
Experience: 35 years tax experience, including four years at a Big 4 firm.

PDtax is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response...

T.G.WMatteson, IL

I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight.

BonnieChesnee, SC

Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation.

JohnMinneapolis, MN

Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with.

OrvilleHesperia, California

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!!

AlexLos Angeles, CA

Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult.

GPHesperia, CA

< Previous | Next >

Meet the Experts:

Wallstreet Esq.

Wallstreet Esq.

Tax Attorney

586 satisfied customers

10 years experience

Mark D

Mark D

Enrolled Agent

1,338 satisfied customers

MBA, EA, Specializing in Business and Individual Tax Returns and Issues

Richard

Richard

Tax Attorney

4,512 satisfied customers

29 years of experience as a tax, real estate, and business attorney.

PhillipsEsq.

PhillipsEsq.

Attorney-at-Law

59 satisfied customers

B.A., M.B.A, J.D.

Robin D.

Robin D.

Senior Tax Advisor 4

15,569 satisfied customers

15years with H & R Block. Divisional leader, Instructor

Megan C

Megan C

Certified Public Accountant (CPA)

8,655 satisfied customers

Licensed CPA, CFE, CMA, CGMA who teaches accounting courses at Master's Level

jgordosea

jgordosea

Enrolled Agent

2,885 satisfied customers

I've prepared all types of taxes since 1987.

< Previous | Next >

Related Tax Questions
My business partner has started a trucking company three
My business partner has started a trucking company three years ago. He has mortgaged trucks from the bank to operate the business. Shipping rates made it hard for him to stay in black for two years. I… read more
Chad EA, CDFA®, CFP®
Chad EA, CDFA®, CFP®
IRS Enrolled Agent, CFP(R),
Master\u0027s Degree
2,610 satisfied customers
I actually have a tax question. NC, individual has sole
individual has sole ownership of 2 LLC companies filing as S-Corp. A truck (over 6000 lbs.) needs to be transferred from 1 company to the other. Title is in correct LLC to be transferred. How can I accomplish this? Can it be transferred with same depreciation information as in the first company? What forms need to be filed? … read more
Mark Taylor
Mark Taylor
Certified Public Accountant
Masters
2,328 satisfied customers
S-Corp Tax question: If an S-Corp sells a fully depreciated
S-Corp Tax question:If an S-Corp sells a fully depreciated vehicle (straight line dept, owned 6 years) for $2,000 (thus a $2,000 gain), how does this capital gain get reported to the shareholder? And … read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Does it matter how to title a vehicle when claiming section
Does it matter how to title a vehicle when claiming section 179 deduction, (single member LLC) … read more
Robin D.
Robin D.
Senior Tax Advisor 4
Vocational, Technical or Trade School
15,569 satisfied customers
I am starting a new business. I am wanting to purchase a tow
Hi I am starting a new business. I am wanting to purchase a tow truck for the business at the amount of 8500 dollars. My business partner and I do not have our llc or business account set up yet. Will… read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
We started a LLC in June of this year. we have $250K in
we started a LLC in June of this year. we have $250K in capital equipment start up loan. we have put in ourselves $140K of our own money. for 2015 the business will have roughly a net loss of $200K. B… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
WE ARE AN LLC THAT USED TO BE TAXED AS A PARTNERSHIP. 2012
WE ARE AN LLC THAT USED TO BE TAXED AS A PARTNERSHIP. 2012 WE FILED OUR FINAL PARTNERSHIP RETURN SINCE ONE OF THE PARTNERS TRANSFERED HIS OWNERSHIP TO THE REMAINING ONE PARTNER AND BECAME A SINGLE LLC… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Im starting a car rental business. I want to buy 2 cars to
I'm starting a car rental business. I want to buy 2 cars to start with, and buy them 100% in cash out right. Can I utilize section 179 to deduct the full purchase price of both cars, since they are ca… read more
CFEPro789
CFEPro789
Fraud Analyst
Master\u0027s Degree
369 satisfied customers
I have a business that is set up as an llc. The depreciation
I have a business that is set up as an llc. The depreciation on my company trucks comes off my net business income right? How is depreciation calculated trucks cost about $8,000 each. Not accelerated … read more
NPVAdvisor
NPVAdvisor
CFP Licensee and Practitioner
Master's Degree
180 satisfied customers
I am thinking of starting a business before the end of the
I am thinking of starting a business before the end of the year and buying an automobile and other equipment to use in that business. The question is: Could I get business deductions that would reduce… read more
Jax Tax
Jax Tax
Senior Tax Attorney
Master's Degree
1,363 satisfied customers
This is federal income tax question for 2011. I am a self
This is federal income tax question for 2011. I am a self employed farmer. I am building a new machine shed which will be complete in 2011. The shed will be depreciated 100% under the "bonus depreciat… read more
Charles Greiner
Charles Greiner
Owner
Bachelor's Degree
2,436 satisfied customers
I am considering starting a business and am wondering about
I am considering starting a business and am wondering about how to structure things so as to maximize write offs on any capital expenditures I might incur. This is something that might need to happen … read more
Charles Greiner
Charles Greiner
Owner
Bachelor's Degree
2,436 satisfied customers
A question regarding Section 179 depreciation for heavy SUVs Our
A question regarding Section 179 depreciation for heavy SUVs: Our small Schedule C business has a heavy SUV that is used 90% for the business. This SUV is fully depreciated and has to be replaced. A n… read more
jgordosea
jgordosea
Enrolled Agent
Bachelor's Degree
2,885 satisfied customers
LLC Partnership bought a used pickup truck for 100% use in
LLC Partnership bought a used pickup truck for 100% use in the business in 2009 for 5,000. How much depreciation can be taken in 2009 and where on 1065 forms (179 expense?)? I understand that use and … read more
Anne
Anne
Master Tax Preparer
1,328 satisfied customers
This year my wife, and grandson started a LLC with chapter
This year my wife, and grandson started a LLC with chapter S option. There will be apx. $40,000 in profit to divide 70-30% between the two owners. If they purchase a partcle of land for $38,000, owned… read more
jgordosea
jgordosea
Enrolled Agent
Bachelor's Degree
2,885 satisfied customers
I have an LLC (cabinet construction) formed 03/07 thinking ...
I have an LLC (cabinet construction) formed 03/07 thinking of a 1020s. My wife is also listed on the formation papers of the llc as a managing member/organizer with me. I grossed $7330, have extensive… read more
jgordosea
jgordosea
Enrolled Agent
Bachelor's Degree
2,885 satisfied customers
The owner of the company wants to buy a new car. I was ...
The owner of the company wants to buy a new car. I was told I could expense $17,000 of the cost. Then someone else said the threshold was $15,000, someone else said $20,000. Which is it? What I''m pla… read more
jgordosea
jgordosea
Enrolled Agent
Bachelor's Degree
2,885 satisfied customers
My wife and I started a photography business this year. We ...
My wife and I started a photography business this year. We are seup as an LLC. I am wondering how to deduct/depreciate my equipment purchases. We have several thousand dollars worth of equipmet that w… read more
LEV
LEV
Retired
Bachelor's Degree
14,896 satisfied customers
Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Disclaimer: Information in questions, answers, and other posts on this site ("Posts") comes from individual users, not JustAnswer; JustAnswer is not responsible for Posts. Posts are for general information, are not intended to substitute for informed professional advice (medical, legal, veterinary, financial, etc.), or to establish a professional-client relationship. The site and services are provided "as is" with no warranty or representations by JustAnswer regarding the qualifications of Experts. To see what credentials have been verified by a third-party service, please click on the "Verified" symbol in some Experts' profiles. JustAnswer is not intended or designed for EMERGENCY questions which should be directed immediately by telephone or in-person to qualified professionals.

Show MoreShow Less

Ask Your Question

x