I wanted to get a large SUV for my business. Anyone know if the $25,000 bonus + depreciation applies for 2007?

Question

Just hoping the section 179 still applies to this. The vehicle is over 6000 pounds and would be used for 70% business.

Answer 1

The "bonus" depreciation I believe you're thinking of is no longer in effect. But yes, you can deduct $25,000 of the cost of an SUV as a Section 179 expense, but it's a limitation. Some assets you can 179 the entire cost of. People starting buying big, expensive SUV's and expensing the entire cost the first year, so Congress went in and put a limit on the amount you could depreciate on them in the first year.

Since you're using the vehicle for 70% business use, you'll only end up depreciating 70% of the entire cost of the vehicle.

Hope this helps!

Answer 2

It's not bonus depreciation, it's a limitation on Sec 179 deductions for big SUVs. The reason is that lots of businesses were buying those things for personal use and writing off the cost as a business deduction. They bore little semblance of a reasonable and necessary business expense for most of the businesses that bought them. A plumber would have little business need for an Eddie Bauer Excursion or Expedition or an Escalade. Congress stepped in with the Sec 179 limitation on those vehicles to curb the abuse.

Answer 3

Yes, Section 179 deduction for SUVs placed in service after October 22, 2004 is limited to $25,000 and is still in effect for 2007.