Posted on 12/30/2014 4:18:02 AM PST by LogicDesigner
I believe there is a fine line between a true business expense and a "subsidy" is crossed when the legal definition of a "business expense" is set up in such a way that some purchases are favored over others for no objectively good reason.
That seems to be the case here, since I can find no reason why a new computer, a copying machine, or a 6,000-lb. vehicle would qualify for a Section 179 tax deduction, but a 5,000-lb. vehicle would not.
This isn't a subsidy for the business owner, mind you. It's really a subsidy for SUV and light truck manufacturers.
No, I wasn't. I may have been confusing in my post, though. I wasn't questioning whether the business owner was using the vehicle for a legitimate business-related purpose (I'm assuming they are). I was questioning whether they really needed a 6,000-lb. vehicle for their business, or if they could have used a smaller vehicle but opted for the larger vehicle simply because the tax code gave them an incentive to do that.
Egad man! The MLS fees would cost you a fortune!
Maybe so. LOL. I'm actually in that position, though not as a real estate agent. I'm an engineer by trade, and I work on projects as far as about 500 miles away from my home office.
Bozeman, FRiend.
Keep in mind the limitations on this deduction, both over and under 6,000 lbs have deduction value, but not full purchase price.
http://www.section179.org/section_179_vehicle_deductions.html
For passenger vehicles, trucks, and vans (not meeting the guidelines below), that are used more than 50% in a qualified business use, the total deduction for depreciation including both the Section 179 expense deduction as well as Bonus Depreciation is limited to $11,060 for cars and $11,160 for trucks and vans.
Certain vehicles (with a gross vehicle weight rating above 6,000 lbs but no more than 14,000 lbs) qualify for expensing up to $25,000 if the vehicle is financed and placed in service prior to December 31 and meet other conditions.
I believe this is precisely what the recent legislation changed, from $25,000 to $500,000. A small business owner could buy several (large) vehicles, up to a total value of $500,000 and deduct them all. Mostly, those who have already done it sometime during 2014 will be the ones who benefit, although I'm sure some large orders have been placed during these last few days.
No. It only changed the total allowance for any and all equipment. It did not change the per vehicle allowance.
http://www.section179.org/section_179_deduction.html
Several years ago, Section 179 was often referred to as the “SUV Tax Loophole” or the “Hummer Deduction” because many businesses have used this tax code to write-off the purchase of qualifying vehicles at the time (like SUV’s and Hummers). But, that particular benefit of Section 179 has been severely reduced in recent years, see ‘Vehicles & Section 179’ for current limits on business vehicles.
The weight requirement for the tax deduction should have been another requirement.
It was meant to give a deduction for true equipment and capital investment (like tractors),
but has been applied to other vehicles under this lazy standard of looking only at the weight.
The 6,000 lb curb weight is the government distinction between “Heavy Duty” vehicles intended for more than passenger transport. Farm and other business often needs that capacity found in F-250 and larger type trucks. Weight limit is used for EPA requirements like the CAFE standards.
http://www.epa.gov/otaq/imports/glossary.htm#hdvhdt
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The Tax deduction now includes language to put larger SUV and crossovers into a more limited deduction.
http://www.section179.org/section_179_vehicle_deductions.html
:’) I’ll catch in a bit later. I heard the tongue-twister, or one very close to it, on a UK comedy panel show, I think it’s called QI. Episodes are on YouTube, the host is some kind of trivia nut, or has excellent writers, or both.
Happy New Year Montana FRiend!
Do you know Henry Kriegel?
I know who he is, but not personally.
Take care FReiend - looks like we will have some snow to shovel soon...
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