I do not believe there is any limit on the frequency of taking the bonus depreciation. However, I suspect that if you can take the $7500 EV credit that would reduce the amount you could depreciate under 179. You would not be able to double dip. But with the EV credit you would never have to worry about recapture on your depreciation.
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$7500 IRA business tax credit
- Thread starter bayareaever
- Start date
ithinkmac
Member
you can take as much as 179 bonus as your business allows. I believe bonus is $1MM per year. haven't read up in the last couple of years on this.
With the accelerated depreciation. technically you can write the whole car in 1 year, but I would imagine that would raise some flags. But as a small business, I believe you can have a fleet of 4 cars or less without too much paperwork. with justification of course, like other business within your field are doing something similar. You can't write off a Lambo Urus for a custodian service field for instance, since no others in that field or business will have a requirement to use a Lambo Urus.
-ThinkMac-
With the accelerated depreciation. technically you can write the whole car in 1 year, but I would imagine that would raise some flags. But as a small business, I believe you can have a fleet of 4 cars or less without too much paperwork. with justification of course, like other business within your field are doing something similar. You can't write off a Lambo Urus for a custodian service field for instance, since no others in that field or business will have a requirement to use a Lambo Urus.
-ThinkMac-
booziboy
Member
So, If I buy a MX again in 2023, keep it for business use for 90% in 2023 (easy since we have M3 for commute/personal) , take the bonus depreciation over 2-3 years (since only 80% is allowed in 2023). Then after 3 years I can sell the car and not have to worry about recapture. (Since its technically depreciated or will recapture kick in with the regular route.
ithinkmac
Member
if fully depreciated. should be no re-capture. you can set your depreciation schedule. consult your CPA. again, I'm no tax expert.
-ThinkMac-
-ThinkMac-
I believe the funds from the sale of the car are considered income if the asset is fully depreciated.
Happy to have found this thread.
I'm just looking for some advice as I just started my business as a c corp. My understanding is 80k limit doesn't apply, and AGI doesn't apply for credit on business vehicles. That said, I'm in need for the 6 seater and can't decide between plaid and LR. Both go above 80k
Would love some more perspective and if anyone has any recent news than what's already shared in this thread
I'm just looking for some advice as I just started my business as a c corp. My understanding is 80k limit doesn't apply, and AGI doesn't apply for credit on business vehicles. That said, I'm in need for the 6 seater and can't decide between plaid and LR. Both go above 80k
Would love some more perspective and if anyone has any recent news than what's already shared in this thread
This what my accountant said:
“The S corp credit flows to your personal return and is subject to personal AGI limits.
In order to get around the limitations you would have to have a C Corp”
So looks like I have to stick w the LR haha
“The S corp credit flows to your personal return and is subject to personal AGI limits.
In order to get around the limitations you would have to have a C Corp”
So looks like I have to stick w the LR haha
Jayskywalker21
Member
Really curious as to how this would work. Lets say you went with a plaid and it was.... 100k. You do section 179 and you write off 80% in your first year so 80k in tax write offs. Lets say you're taxed at about a 30% rate. So you'd be saving 24k total in taxes paid?
Plaid = 100k
80% of 100k = 80k
Tax write off = 80k(Need to be that profitable to write off)
Tax rate = 30%
30% of 80k = 24k
24k savings when filing your taxes next year from the tesla. Is this right or am I way off in my understanding?
Also you must keep the car for 5 years.
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I believe your accountant is incorrect. When reading the clarification, it does discuss those things but that is the “new clean vehicle credit” where is mentions partnerships and a corps, not the “qualified commercial clean vehicle credit”. It does not state anything to that extent. Read on the commercial credit below
Attachments
From another accounting firm. Good read. Specifically the highlighted part
Attachments
Given the weight of the X I believe it is eligible for bonus depreciation, which means you can expense the percentage of business use the first year.
Jayskywalker21
Member
I believe so, but that assumes your business use was 80%. You will probably want to have that well documented.
For 2023, bonus depreciation is only 80% times business use. In 2024, bonus decreases to 60% times business use.
Of course with the X you might also be eligible for the $7500 BEV credit in 2023. Will have to wait until 2024 to see if that amount stays the same.
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