179 deduction for business truck?

Question

I hope this is the correct place to ask this question.
I purchased a new truck that weight 8800 lbs this year for my Rental property business.
I use it 100% for the business and have another car for my personal use.
I put it into service in October of last year ( 2006 )and was wondering how much I can take off on the 179 deduction.
The problem is I didnt keep a mileage log but have all of my receits for gas, oil and all Maintenance.
Can I take the 179 deduction if I dont have a mileage log to prove the business use of the truck?

Answer 1

To qualify for the section 179 deduction, your property must have been acquired for use in your trade or business. Property you acquire only for the production of income, such as investment property, rental property (if renting property is not your trade or business), and property that produces royalties, does not qualify.

You cannot elect to expense more than $25,000 of the cost of any heavy sport utility vehicle (SUV) and certain other vehicles. This rule applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways, that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds gross vehicle weight. However, the $25,000 limit does not apply to any vehicle:

Designed to seat more than nine passengers behind the driver's seat,

Equipped with a cargo area (either open or enclosed by a cap) of at least six feet in interior length that is not readily accessible from the passenger compartment, or

That has an integral enclosure fully enclosing the driver compartment and load carrying device, does not have seating rearward of the driver's seat, and has no body section protruding more than 30 inches ahead of the leading edge of the windshield

Answer 2

Keeping a mileage log is not a requirement for taking a Section 179 deduction on the purchase of it. You would need some means of apportioning business and personal use and mileage logs are a good way to substantiate that. If you claim to use it exclusively for business use but don't keep mileage logs or other records to substantiate your claim, the IRS would look at the facts at hand in deciding if that was true. Owning another vehicle for personal use certainly helps to substantiate that claim.

There are limitations if it's an SUV primarily intended for carrying passengers. If it's a pick-up with a 6-foot or longer bed, it's not considered an SUV for those limitations.

There are also dollar limitations on Section 179 deductions as well as business income limitations.

See IRS Pub 946 for information on depreciation and Section 179 deductions.

Answer 3

This is where you need a paid tax preparer or CPA for your business if you don't have time to put into learning the rules.

You should have already started a new log for 2007.

A written log is used to prove use of the truck for business purposes.

Receipts are good -

also See form 4562 and

Publication 946 How to Depreciate Property

See Publication 535 Business Expenses

Capital versus Deductible Expenses
To help you distinguish between capital and deductible expenses, different examples are given below.

Motor vehicles. You usually capitalize the cost of a motor vehicle you use in your business. You can recover its cost through annual deductions for depreciation.

There are dollar limits on the depreciation you can claim each year on passenger automobiles used in your business. See Publication 463.

Generally, repairs you make to your business vehicle are currently deductible. However, amounts you pay to recondition and overhaul a business vehicle are capital expenses and are recovered through depreciation.

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Business use of your car. If you use your car exclusively in your business, you can deduct car expenses. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage.

You can deduct actual car expenses, which include depreciation (or lease payments), gas and oil, tires, repairs, tune-ups, insurance, and registration fees. Or, instead of figuring the business part of these actual expenses, you may be able to use the standard mileage rate to figure your deduction. For 2005, the standard mileage rate is 40.5 cents a mile for all business miles driven before September 1, 2005. The rate is 48.5 cents a mile for business miles driven after August 31, 2005, and before January 1, 2006.

If you are self-employed, you can also deduct the business part of interest on your car loan, state and local personal property tax on the car, parking fees, and tolls, whether or not you claim the standard mileage rate.

For more information on car expenses and the rules for using the standard mileage rate, see Publication 463.
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Some of the rules (like mileage rates) have changed for 2006.