Tax Guru – Ker$tetter Letter

Q:

Subject: Quick Question

 

Hello,

 

I have a quick question, a friend and I were talking and he works for a large auto dealer, he is interested buying a Lincoln Navigator from his dealer because he said he can use it as a rolling bill board and write it off under section 179. I have friends that do use their suv to take clients to homes and show real estate but would my friend qualify for section 179 working at the Dealer and using it as a “rolling bill board”?

A:

Your friend should be discussing matters such as this with his own personal professional tax advisor rather than relying on second hand advice from strangers on the internet.

I’m sure your friend’s personal tax advisor will  answer this question in the same manner as I have in the number of times I have addressed this exact same issue in postings on my blog. 

Business deductions for a vehicle, including Section 179, are purely based on the business usage, which is measured by business miles driven as a percentage of total miles driven for the year.  What is painted on the vehicle is completely irrelevant. 

Another thing your friend will discover from his personal tax advisor is that, as an employee of the auto dealer, his miles back and forth between his home and the dealership count as personal non-deductible commuting miles, which will lower his business use percentage for the vehicle.

Kerry Kerstetter