Tax Guru – Ker$tetter Letter

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66.7 Inch Truck Bed…

Posted by taxguru on November 9, 2007

Q:

Subject: section 179…..Truck has less than 6 foot cargo bed

Thanks for your expertise!!

 

I am thinking of buying a 2008 Toyoto Tundra for my business.  Over 6,000 gross weight but the cargo bed is less than 6 feet long…..can I still take section 179 on the full purchase price of $40,000???

 

Thanks


A:

Checking the Tundra website, you are obviously looking at the CrewMax model, because that is the only one with an inside bed length of less than 72 inches.

Unfortunately, that vehicle does appear to fall under the SUV limit of a maximum of $25,000 Section 179 deduction, with the rest of the purchase price being depreciated over its class life of five years.

If you are truly desperate for maximum first year deductions, you should work with your personal professional tax advisor to see if it would be worth your while to take some more creative and aggressive steps, such as splitting the purchase between two entities, such as a C corp and a Schedule C business, where each could then claim up to $25,000 per SUV. 

Good luck.  I hope this helps.

Kerry Kerstetter

 

Follow-Up:

thanks for the help Kerry!!  I was afraid I was right on the limitation due to less than 6 foot bed..  I “assume ” the worst case is IF I took the full 40k 179 deduction in 2007 and got audited…..would still get the $25k deduction but be required to depreciate the remaining 15k over 3-5 years..plus penalty and interest of course:(

 

thanks again….will consider the 2 entity concept.

 

My reply:

You really need to be working directly with your very own professional tax advisor because thinking like that (claiming Section 179 for the full $40,000 and praying for no IRS audit) is ridiculously reckless and can get you into serious trouble.  Any good creative tax pro will be able to save you hundreds of times more than his/her fee in taxes, as well as keep you out of trouble with the IRS.

Good luck.

Kerry

 

  

 

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