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Qualified Non Personal Use Vehicle

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    Qualified Non Personal Use Vehicle

    Good morning, all.

    Can my friend 179 this van that he bought for business purposes?

    "Any truck or van placed in service after July 6, 2003, that is a qualified nonpersonal use vehicle. A truck or van is a qualified nonpersonal use vehicle only if it has been specially modified with the result that it is not likely to be used more than a de minimis amount for personal purposes. For example, a van that has only a front bench for seating, in which permanent shelving has been installed, that constantly carries merchandise or equipment, and that has been specially painted with advertising or the company's name, is a vehicle not likely to be used more than a de minimis amount for personal purposes."

    My friend does his own taxes. He purchased a van for his painting/contracting business thinking that he could 179 the entire expense (inaccurate information that he got from me). The van is a fuel efficient environmentally friendly Scion, GrossVehicleWeightRating well under 6,000lbs.

    This guy has already removed the back seat of his 'minivan' so it's easier to haul ladders, furniture and other equipment. I'm thinking that if he slaps decals on his van that read 'Mxxx Xxxxx's Painting' he might take the position that his vehicle is ‘qualified nonpersonal’ and 179 more than $3,260.

    What would be the consequence of this fellow 179ing this van on the 4562 that he prepares and signs himself? Again this honestly is not my client. I'm a bit concerned of him putting 'Scion Van' on column B line 26 while claiming 'nonpersonal' use.

    Other info: This guy keeps good records. I have no reason to believe that he's hiding income. He reports approx 40,000 of receipts and gets 1099ed for 0.00. I know that he's generally under aggressive about taking deductions.

    Another thought i had. If he decides to take the lesser $3,260 as 179 deduction I know he can get another deduction by getting an IRA in addition to his SEP. There are a few other deductions also available to him. Giving him this info might help me make up for the half assed advice that i previously gave him about 179ing a van of any weight.


    Thanks for reading (I know this question might be also be a little shady, kind of like my last one.)

    #2
    He has to do more than just remove the back seat. There has to be some sense of permanence, such as installing permanent shelving in the cargo area making it so that the back seats cannot be put back in. A mini van with a sign and removable back seats is not a qualified nonpersonal-use vehicle.

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      #3
      Thanks Brad

      I appreciate the response.

      I would be tempted to argue that removing the rear passenger seat requires several bolts to be unscrewed and is 'permanent' enough. But then again i don't even know that for sure the seat might come out without tools. Maybe i should ask.

      (Thanks, not necessarily the overly liberal interpretation that i was hoping to hear but sincerely appreciated. I'm certainly guilty of wishful thinking and 'opinion shopping.')

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        #4
        Every Mini Van on the market today has removable seats with no tools required. I can get my seats out in under one minute, and re-installed in less than 2.

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          #5
          Thanks again, Brad.

          Better I hear it from you than my friend hear it from the IRS.

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