TP sect 179 vehicle in same tax year terminates business

[AZ-Tax]

TP uses sect 179 in 09 for vehicle purchased in 09 to replace previous business vehicle in which TP was using standard mileage. TP is considering having 2009 (full year) as last year for business. TP does not plan to replace business with other business. How is sect 179 recaptured? When the vehicle is eventually sold or the value of the vehicle when taken out of service?

[Burke]

He will have to recapture the full amount in 2010.

[AZ-Tax]

Will that be base on the Kelly Blue Book value at time...

Will that be based on Kelly Blue Book value on date vehicle was taken out of service?

Or, does TP have to recapture entire sect 179 deduction used in 2009 on 2010 tax return?

[ChEAr$]

He will have to recapture the full amount in 2010.

Unless the business terminated some time before 12/31/2009.

[taxmom34]

it's whatever amount was taken as a 179 expense isn't it. if he has to include in 2010 why take the expense now, unless he is in deeeep trouble this year. wouldn't he have to use actual instead of standard mileage.

[Burke]

Will that be based on Kelly Blue Book value on date vehicle was taken out of service?

Or, does TP have to recapture entire sect 179 deduction used in 2009 on 2010 tax return?

No on the KBB value. It ceases to be a 179 asset when the asset use drops to below 50%. He has to recapture entire sect 179 used in 2009 on 2010 return, assuming he did not have the asset in service for one year. Also note that he has to report the recapture as Other Income on Sche C and SE tax will apply.