“Heavy” Trucks and Vans Continue to Qualify for Fast Cost Recovery
Passenger autos used primarily for business (i.e., greater than 50 percent) are subject to significant federal depreciation limitations, e.g., $3,160 for passenger autos and $3,460 for light trucks or vans in the first year at 100 percent business use. However, the luxury auto depreciation limitations only apply to passenger autos. A truck or van escapes passenger auto status if its Gross Vehicle Weight Rating (GVWR-the manufacturer’s maximum weight rating when loaded to capacity) exceeds 6,000 pounds. A vehicle that is not classified as a passenger auto and used primarily for business is depreciated without limit under the MACRS rules. And, these vehicles also qualify for the Section 179 deduction. Under current 2015 tax law, you can expense a total of $25,000 for all eligible property placed in service in tax years beginning in 2015 using Section 179. However, Congress may extend the increased Section 179 ($500,000) and bonus depreciation (50 percent) that existed for 2014. It should be noted that qualified vehicles are likely subject to a $25,000 per vehicle limit for Section 179 expensing if Congress extends the increased deductions. And, you must have real-time records (such as a mileage log) that establish […]
