Auto sec 179

[TAX]

Client, a doctor, wants to buy a car under corporation name in 2007 (this month) over 6000 pound. Can he take sec 179 deductin for the cost of the car?

Thank you.

[BOB W]

Vehicles over 6,000 pounds. Passenger autos rated at more than
6,000 pounds unloaded gross vehicle weight, or trucks and vans rated
at more than 6,000 pounds loaded gross vehicle weight are not subject
to the Section 280F depreciation limits. However, such vehicles
may still be considered listed property for purposes of the other
listed property rules, including the requirement that the vehicle be
used more than 50% for business to take the Section 179 deduction.

10-6 Automobiles and Listed Property PER TTB

[WhiteOleander]

Is there a business use for the car?

[John of PA]

Yes

The short answer is yes her can take the 179 ded.

[veritas]

Hmmm

Does Doctor make house calls? What would be the business use? Maybe driving between office and hospital? Must be over 50% business use to take sec 179.

[abby]

It would be 100% in the corp

I believe the proper treatment in the corp would be 100% business expense and treat any personal use as a fringe benefit to the employee added to the W2 and subject to FICA.

In that case, the less than 50% business use wouldn't come into play as a fringe benefit is a business expense, too.


The 179 would be subject to the $25,000 limit most likely.

[veritas]

If I use my car owned by my corporation

49% for business purposes and I include in my W2 with proper witholding the fringe benefit value, I can deduct the car 100% but I can not take sec 179 or accelerated depreciation. The 51% is considered for investment purposes not business.

[abby]

Tb 13-32

Veritas

I'm looking at the above page under VEHICLE DEPRECIATION CLAIMED BY EMPLOYER and it's stating the luxury limits of section 280F would apply, but nothing about 50% limitation to SL under sec 280F, which would be similar to the section 179 limitation. It doesn't mention sec 179 at all.

Do you have a cite for this? I've certainly missed stuff before, so I'd be most appreciative if you can help me pin this down.

[veritas]

Form 4562

Checkout form 4562 instructions page 24

[abby]

Form 4562 Line 26

I did find a reference on the line 26 instructions that applies to this case - excluding a more than 5% owner - I think that's what you were pointed to? Looks like it could work for a non owner employee in certain circumstances.

Thanks for the info.