If the value of the truck is $10K how much could I potentially write off for depretiation sake?
And if I bought it in 01/2007 can I write it off for last year's taxes?
2007-01-18 15:07:05 · 3 answers · asked by Anonymous in Business & Finance ➔ Taxes ➔ United States
I am a sole proprietor with a tax id..
2007-01-18 15:54:04 · update #1
The car is an SUV
2007-01-18 15:55:00 · update #2
First off, the truck must be business use property in order to be depreciated, and only the percentage of business use (based on business miles over total miles) can be depreciated. Say, for example, that the value of the truck is $10,000 and it is 100% business use. Then the full $10,000 can be depreciated. Since the value of the truck is low enough so it does not meet the listed property limit for an automobile (assuming that it is a pickup truck and not a "real" truck), then you can depreciate the vehicle over a 5 year life. Using the half year convention, this means that the depreciation in the first year is 20%, or $2,000. You mentioned Section 179, which is an election where you can elect to fully depreciate the item in one year. As the Section 179 limit is based on income from all sources, assuming that your income is at least $10,000, then you would be able to claim the full $10,000 as your Section 179 deduction for the year.
As to your second question, depreciation can only be claimed in the year that the asset is placed into service. If you purchased the truck in January 2007, that means the asset was not placed into service in 2006, so you cannot claim depreciation, or elect Section 179 treatment on the asset, until 2007.
2007-01-18 15:32:05 · answer #1 · answered by jseah114 6 · 2⤊ 0⤋
You can deduct vehicle expenses for your sole proprietorship on Schedule C.
If the SUV has an unloaded gross weight of over 6,000 pounds, the portion of the cost of the vehicle attributable to the business could potentially be entirely expensed through Section 179 for the year of purchase. If bought in 2007, the expense is taken on the 2007 tax return.
If the vehicle is under 6,000 pounds, no Section 179 depreciation is allowed.
2007-01-18 17:57:45 · answer #2 · answered by ninasgramma 7 · 0⤊ 0⤋
You can do the section 179 for all, BUT, you can't do it for 2006 if bought in 2007. This has to be for investment / business. This should be for calendar year and not fiscal.
Some advice - if you expect to increase $$ for 2007 or future years, do not take the 179.
2007-01-18 17:43:24 · answer #3 · answered by Successy Lady 1 · 0⤊ 0⤋