Partnership Inactive for a Year-Vehicle

[equinecpa]

I'm doing a 1065 return. The business was pretty inactive in 2009. No revenue billed (work performed but not billed until 2010) and a handful of expenses. This was formerly and may yet again be a high revenue partnership -the partners just didn't have any contract work in 2009 and took W-2 jobs.

My dilemma: They have a vehicle on the books which they Sec 179'd back in 2005. They used it for their commuting vehicle in 2009. This vehicle is not titled to the partnership and I'd like to get it off of their 2009 return. Do I recapture the excess depreciation just like I would if it were a schedule C vehicle?

[ChEAr$]

I'm doing a 1065 return. The business was pretty inactive in 2009. No revenue billed (work performed but not billed until 2010) and a handful of expenses. This was formerly and may yet again be a high revenue partnership -the partners just didn't have any contract work in 2009 and took W-2 jobs.

My dilemma: They have a vehicle on the books which they Sec 179'd back in 2005. They used it for their commuting vehicle in 2009. This vehicle is not titled to the partnership and I'd like to get it off of their 2009 return. Do I recapture the excess depreciation just like I would if it were a schedule C vehicle?

I have yet to see any vehicle titled in the name of a partnership, so it was probably titled in the name of one of the partners. However tax year 2005 is kinda old by now.

But just how did "they" use "it" for "their" commuting vehicle in 2009? I'm having trouble picturing this.

[equinecpa]

They had W-2 jobs at the same place...drove the vehicle to work each day. Totally outside of the partnership. I agree I'm sure it was titled to one of the partners (so done 1/2 right 1/2 wrong! LOL). I'm not even thinking of going back to 2005 I just want to be ultra-conservative for 2009 and claim 0 business use on this vehicle. That's why I'm wanting to get it off of the partnership books..so...recapture depreciation on 4797 and move on? or any other suggestions?

[BHoffman]

I see your dilemma. Were they actively trying to earn partnership income during the year? I understand the vehicle wasn't actually used much for partnership business, but was that only because business was bad and not because they weren't even trying? If they were trying and intend to continue trying, you might consider the vehicle was actually still in service and perhaps the depreciation might be left alone. If they are taking actual expenses the fuel costs might not be deductible due to the commute. Not sure about the insurance and repairs.

[BOB W]

I think your answer is in the future use of the vehicle. It did have SOME use in the partnership in 2009. One year of no use doesn't create a problem in my mind. But a drop in "less than 50% business use" seems to create another problem.

What is the future business use? If it is on going, I would let 2009 slide. If no future use, bite the "recapture bullet" in 2009.