Section 179

[Lucho]

If an asset (a truck) original cost is $25,000 and the taxpayer spent $3,500 more in additions and improvements to make it suitable for the kind of business he runs, what is the amount of 179 deduction that qualify? $25,000 and capitalize $3,500 or the total $28,500 invested in the truck?. I will read about this but if anyone is willing to give me an opinion or help me find the answer, I will appreciate.

Thank you and have a happy and blessed dinner.

Lucho

[kcjenkins]

You add the original cost, the additions made, and the sales tax, and all of that goes on the depreciation schedule. Then you may use §179 on as much of that total as you want to use, subject, of course, to the limitations on total §179.

[RoyDaleOne]

Truck is not a clear enough description. 18 Wheeler, weight, what were the improvements?

[jainen]

>>you may use §179 on as much of that total as you want to use, subject, of course, to the limitations on total §179.<<

If new, a $25,000 truck is certain to be subject to the luxury auto limits in Section 280F as well as Section 179.

[Lucho]

>>you may use §179 on as much of that total as you want to use, subject, of course, to the limitations on total §179.<<

If new, a $25,000 truck is certain to be subject to the luxury auto limits in Section 280F as well as Section 179.

Thank you jainnen. I have forgotten about that.

Good night.

[RoyDaleOne]

There is a separate table for trucks weighting over 6,000 pounds. The luxury car depreciation only applies to a "listed automobile". The fact that a vehicle is not subject to the automobile caps does not mean the vehicle is not listed property. This is because listed property includes any property used as a means of transportation. Any truck that is a qualified non-personal use vehicle as defined in Temp. 1.274-5T(k) is not subject to the luxury car depreciation limits.

I am guessing that the vehicle is listed property.

However, substantiation of business use is necessary to prove the deduction.

[Lucho]

There is a separate table for trucks weighting over 6,000 pounds. The luxury car depreciation only applies to a "listed automobile". The fact that a vehicle is not subject to the automobile caps does not mean the vehicle is not listed property. This is because listed property includes any property used as a means of transportation. Any truck that is a qualified non-personal use vehicle as defined in Temp. 1.274-5T(k) is not subject to the luxury car depreciation limits.

I am guessing that the vehicle is listed property.

However, substantiation of business use is necessary to prove the deduction.

Thank you RoyDaleOne for taking the time again. I appreciate your help.

Lucho