Honk Honk!! Here comes the truck!!

[Beersheba]

A high income customer ($275,000 AGI) is buying a truck in 2022. Not just a pickup truck but a beast, some $85,000. I'm sure he has delusions of subtracting $85K from his AGI for 2022.

Truck is probably over 6000 lbs. When this limit were placed on personal autos, the manufacturers started making pickup trucks bigger and bigger to avoid limits.

I'm sure he will want to take "actual" expenses for 2022, and doesn't care that this may lock him in to lower benefits in future years. That's OK with me, it will just run up my fee. And then the benefit will depend on how many miles he can log, resulting in a business percentage. He is not expecting this either.

This customer is going to be crestfallen enough when I see him, but I want to be knowledgeable enough to give him options.

Can he switch to using mileage method as a deduction in future years? I have been taught he can't do this.

I am reading in TTB about how to handle this, especially depreciation. I understand there is a s.280 limit of $51,000 and then I read somewhere else the limit is $18,200 and of course these are numbers for 2021. And there are more numbers for certain situations. I need help understanding the different numbers in TTB.

Can any of you simplify this in a post that is reasonably succinct?

Thanks in advance

[ATSMAN]

For passenger automobiles to which bonus first-year depreciation deduction applies and that are acquired after Sept. 27, 2017, and placed in service during calendar year 2021, the depreciation limit under Sec. 280F(d)(7) is $18,200 for the first tax year (an increase of $100 from 2020); $16,400 for the second tax year (an increase of $300); $9,800 for the third tax year (an increase of $100); and $5,860 for each succeeding year (an increase of $100).

To qualify as a “heavy” vehicle, an SUV, pickup or van must have a manufacturer’s gross vehicle weight rating (GVWR) above 6,000 pounds. So, they qualify for 100% first-year bonus depreciation and Sec. 179 expensing if used more than 50% for business.
There is a Rev Proc I think 2021-31 (But check the quote).

[Maribeth]

I always have to stop and look this one up. If you start off, in your first year, using the mileage rate, you have adopted the straight-line method of depreciation. You can change to the actual method in future years, but you must continue to use straight-line depreciation. If you start off using the actual method, then you have adopted an accelerated method of depreciation. That is why you cannot go to the standard mileage method in future years.

[Beersheba]

Good answers, and relevant as well. Thank you.