Section 179 tax deduction for Cross Turismo?

Kayone73

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Great discussion, I'm following along as well and plan to consult my CPA how to best approach the purchase of my TCT when I take delivery in late Oct.

Also important to make sure you also have a personal, non-business vehicle under your name as well if you intend to deduct the maximal amount possible towards your 'business vehicle' purchase.
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MohCT4

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On "bonus" depreciation, and indeed on any depreciation on a car or truck:

There is a lot of misinformation about this in the press and online. If you have an interest in claiming actual expenses on your vehicle, and you actually use that vehicle regularly for bona fide business usage, then read further:

* Be sure your use qualifies as "business use," and that you are ready to document that business use, including with written records on mileage and purpose of mileage.
* Commuting to work is not "business use." Neither is driving to your cottage up north, or to ballgames where you might meet a buddy of yours that works with you. Porsche meet ups, impromptu road rallies, cars and comedians get coffee, and the like don't count. (Unless you are a professional comedian and that is your gig.)
* These records will have to include all your costs (including depreciation, more on that below), and repairs, and insurance.
* You may only deduct the costs for business use. Do not rely upon any internet posts that suggest you get can deduct more, just because (here's a selection of items I've seen): it weighs more than 6000 lbs; you titled it in the name of your business; you know an accountant that said you could; you know a Mercedes driver that says he does it; etc.

Here is the IRS summary, and a link to their publication:
"If you use your car only for business purposes, you may deduct its entire cost of ownership and operation (subject to limits discussed later). However, if you use the car for both business and personal purposes, you may deduct only the cost of its business use.

You can generally figure the amount of your deductible car expense by using one of two methods: the standard mileage rate method or the actual expense method. If you qualify to use both methods, you may want to figure your deduction both ways before choosing a method to see which one gives you a larger deduction."
https://www.irs.gov/taxtopics/tc510

The only time depreciation enters into your deduction is when you (a) meet all the requirements, and (b) choose the actual expenses method. Then you calculate depreciation (or, rather, you select an allowable depreciation method and use it). Indeed, then and only then, a very heavy vehicle could qualify for higher depreciation. Here is the IRS topic:
https://www.irs.gov/publications/p463#en_US_2020_publink100033951
That is a complicated topic, but for the large majority of people reading this, it will probably not be worth the money to pay a tax accountant to figure this out as well as keep the necessary records. For a handful it will, and I suggest they consult a tax advisor and read the IRS publication above.

PLA
Great post! Excellent information, and you boiled it down perfectly. In the end, know what you’re getting yourself in to if you choose to use section 179 on a car/truck. Pleading ignorance will likely not work, “The IRS is not as forgiving as I am…”
 

kcsf

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Has anyone spoken to a tax professional regarding this topic?
 

iamfrozt

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I ordered my CT4 last month, delivery on 7/30. So I happened to look at the spec sheet for the CT and noticed the Gross Vehicle Weight Rating(GVWR) is 6360lbs. Considering this car is being marketed as a CUV, and I’m using it primarily as my daily driver to and from work, I think it qualifies for the “heavy vehicle” 100% first year bonus depreciation. Heavy vehicles are defined as CUVs, SUVs, Trucks and Vans that are over 6000lbs GVWR.

Someone please tell me if I’m wrong here! Because if I’m correct...wow, this car is gonna be phenomenal to drive and the gift that keeps on giving!
It would need to be purchased/registered under a business entity, at which point you can Section 179 it (barring any discrepancies due to any unique accounting circumstances). I'd recommend checking with your CPA on any possible limitations tied to your S-Corp/LLC/whatever you register it under. That's my .02
 

f10tt

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Has anyone spoken to a tax professional regarding this topic?
yes. I have a single member LLC that my RWD PB+ will be dedicated to and it’s eligible for the 179 deduction.
 


Kayone73

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I have at least a month before I take delivery of my vehicle and still haven't decided if I should push thru and purchase the vehicle and go for the full section 179 deduction. ?
 

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I have at least a month before I take delivery of my vehicle and still haven't decided if I should push thru and purchase the vehicle and go for the full section 179 deduction. ?
I do not quite understand how/why the section 179 would be a deal-breaker. You can always lease and write of the vehicle expenses that way.

Regardless in this type of situation, put the section 179 decision in the CPA or tax attorneys hand.
 

Kayone73

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I do not quite understand how/why the section 179 would be a deal-breaker. You can always lease and write of the vehicle expenses that way.

Regardless in this type of situation, put the section 179 decision in the CPA or tax attorneys hand.
Lease only deducts a portion of the vehicle purchase price, section 179 accelerated depreciation will write off the full vehicle purchase amount. It makes a difference if one wants to own the vehicle at a maximal tax deduction.
 


ithinkmac

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The CT does not qualify for 179 write-off.

It meets the GVWR requirement, but does not see the Truck/SUV classification requirement.

You can write off operational expenses, but not the full 100% bonus depreciation.

-ThinkMac-


I have at least a month before I take delivery of my vehicle and still haven't decided if I should push thru and purchase the vehicle and go for the full section 179 deduction. ?
 
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MohCT4

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The CT does not qualify for 179 write-off.

It meets the GVWR requirement, but does not see the Truck/SUV classification requirement.

You can write off operational expenses, but not the full 100% bonus depreciation.

-ThinkMac-
Yup, this is correct. The VIN shows that it is a passenger car, not a truck/SUV/crossover.
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