P/Y section 179 and current year expense

[Dave T]

Perhaps i am overthinking this or maybe underthinking it or maybe not thinking at all.

Financial advisor tells me he is going to refer a new client to me and gives me a bit of a heads up on their prior year return. Tax payer bought a pickup truck in 2019 for a side business and prior preparer took section 179 for entire amount.

Assuming he is still using the truck for business and he provides me with mileage, how do I report this?  Of the .$.56 per mile rate, $. 27 is related to deprecation. Do I  take the difference or does he have to calculate actual expenses?  

Thanks very much.

[Lion EA]

If he took depreciation his first year with the truck, then he chose actual expenses and will continue that method for the life of that truck.

Did the financial advisor give you a bit of a heads up on why his referral left his prior year preparer?

[Dave T]

Yes, tax payer felt preparer was too aggressive in his approach to this.  That an inquiry from NYS questioning the item didn't help.

 

[Abby Normal]

And I doubt a side business truck was 100% business, but I suppose it could be.

And maybe he didn't claim the actual expenses in addition to depreciation and you can be the hero who amends it. And thinking about it, I believe you can amend to NOT claim 179 or as much 179, if that would make sense.

[Catherine]

Just now, Abby Normal said:

And I doubt a side business truck was 100% business, but I suppose it could be.

It could be!  I had a client who had a side business truck that was indeed 100% for business.  It guzzled gasoline like a fish, but was perfect for hauling large loads of supplies or heavy equipment to a job site without destroying his car's suspension.  The guy never used it if there was any other way to bring the required items; he claimed you could watch the gas gauge go down while idling at a stop light.  

[Abby Normal]

I shouldn't laugh because that's sooooo bad for the environment.

[jklcpa]

51 minutes ago, Abby Normal said:

I believe you can amend to NOT claim 179

Yes, for TYs after 2002 the sec 179 can be revoked without IRS consent by filing an amended return, but the revocation is irrevocable.  

 

Revocation is irrevocable.  I'm operating on little sleep today, and that phrase brought to mind the silliness of the "You Go Down There" segment from "Little Big Man".  Sorry, couldn't help myself.