Hi Harsh, Since you have a very specific situation, I'll reply to you privately. Be on the lookout for my reply. Thanks!
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Model X IRS 100% Deduction “Hummer Loophole” - 2018 Edition
- Thread starter MelaniainLA
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- Model X section 179 tax break
Hi Harsh, Since you have a very specific situation, I'll reply to you privately. Be on the lookout for my reply. Thanks!
Hello Melanian,
Thank you so much for the detailed post, appreciate the time you spend answering questions. I am planning to place an order soon (Hoping I will take the delivery before the year end). I work for my family business and I work with a W2 ( I am the director and the CEO of the company but do not own it - I own shares in the company that owns this company). Would I still be able to detect it off my tax return if I used it completely for the company's work or do I have to detect it off the company's tax return? What do you think would be the complications I would face?
email is Sajjeev at hotmail.
Thanks,
Sajjeev
Thank you so much for the detailed post, appreciate the time you spend answering questions. I am planning to place an order soon (Hoping I will take the delivery before the year end). I work for my family business and I work with a W2 ( I am the director and the CEO of the company but do not own it - I own shares in the company that owns this company). Would I still be able to detect it off my tax return if I used it completely for the company's work or do I have to detect it off the company's tax return? What do you think would be the complications I would face?
email is Sajjeev at hotmail.
Thanks,
Sajjeev
I'm in Texas where Tesla does not provide financial assistance as they are not allowed to legally. Got approved by Alliant at 2.99%/72 months but as we know they don't allow business name on the registration/title like other credit unions. I'm trying to check major banks which seems to allow but there rates seems to be very high in their websites as we have to apply there as a private party instead of Tesla negotiated rates. Chase: 4.59%/72Months, US Bank 4.59%/72Months, Wells Fargo: 3.90%, TD Bank does even show car loans. Lightstream's unsecured loan did not materialize.
Any suggestion for me Melania & others? Looking for decent rate and a financial institution that allows business name on the title/registration to take advantage of Sec 179 Deduction.
Thanks
Any suggestion for me Melania & others? Looking for decent rate and a financial institution that allows business name on the title/registration to take advantage of Sec 179 Deduction.
Thanks
Hello multiple cars should work but I would confirm with tax person as there may be nuances related to your business.
Hi @MelaniainLA ,
Could you PM me? My accountant is trying to tell me I can't take the section 179 + the 100% bonus depreciation and take the $7500 EV credit. Could you tell me more about what your CPA told you?
Could you PM me? My accountant is trying to tell me I can't take the section 179 + the 100% bonus depreciation and take the $7500 EV credit. Could you tell me more about what your CPA told you?
Unsolicited non-CPA thoughts:
The 7,500 comes off the top (reduces the basis).
The 179 doesn't matter since you can do the 100% bonus.
So you can't stack and double dip, but you can apply all three (or two) items.
However, be sure and compare the 100% deduction vs IRS mileage reimbursement since you repay the depreciation tax when you dispose of the car.
Hello @MelaniainLA,
Like many have asked (and I think you PM'd an answer), my accountant wasn't sure about using the 7500 EV credit with the section 179 and bonus depreciation. Can you bring some clarity to that situation to me as well?
Also, to get the full 25,000 tax benefit under section 179, the business has to show a profit of at least that amount of profit. It sounds like the bonus depreciation can put the business at a loss, but not the section 179. If you don't show a full 25,000 profit, can you just take more of the bonus depreciation? Does that make sense?
Thanks for all the help!
Like many have asked (and I think you PM'd an answer), my accountant wasn't sure about using the 7500 EV credit with the section 179 and bonus depreciation. Can you bring some clarity to that situation to me as well?
Also, to get the full 25,000 tax benefit under section 179, the business has to show a profit of at least that amount of profit. It sounds like the bonus depreciation can put the business at a loss, but not the section 179. If you don't show a full 25,000 profit, can you just take more of the bonus depreciation? Does that make sense?
Thanks for all the help!
Hi! Happy to help. Yes you 100% can get the $7500 tax credit! There’s a form that’s specific to this and it’s considered a “general business credit” which means it’ll likely be considered business income (makes sense). That said, in SOME tax cases you’ll “get” the credit but it’ll be applied in a subsequent tax year rather than 2018. Not sure how that happens though... not sure re the $25,000 and bonus depreciation though! If you haven’t ordered yet let me know if you need a referral
Happy New year!Hi @MelaniainLA & @cpa,
Model X was purchased under business name and used 100% for business in the first year. The business will take section 179 + the 100% bonus depreciation. In the subsequent years is there any issue if the vehicle is driven 51% or more for business use and rest for personal use?
Thank you!
Model X was purchased under business name and used 100% for business in the first year. The business will take section 179 + the 100% bonus depreciation. In the subsequent years is there any issue if the vehicle is driven 51% or more for business use and rest for personal use?
Thank you!
How did you make it? I am thinking about it as well. So the owner of your car is both the business and your wife? How did the insurance company react to this kind of ownership?
I've hit a snag with this and this has to do with insurance/legal side and not so much tax side. I have a vehicle registered under company+personal, and when insurance found out of this, they promptly denied insurance. My personal insurance specifically said that any "business" purpose is excluded from coverage and since there exists a business name, it directly states that I will be using it for business at some point.
I'm not a lawyer by all means but if in case one manages to get into a high liability accident, it seems likely the other party will go after all of the names listed on the registration...
cpa
Active Member
I usually stand alone at parties because I can be the tax buzzkill. But after 40 years, I accept my lot in life.
Since I do not know anyone's personal situation on this thread, what I am to share may not be applicable. But tax laws are weird, and many of the subtle points get overlooked by overzealous taxpayers who think that they have found the Holy Grail.
The TCJA slipped in a new code section, Section 461. Section 461 addresses "excess business losses." Excess business losses are defined as losses (exclusive of the passive rules under Section 469) from flow-through entities like partnerships, S Corporations, and Schedule C self-employment from business or profession. These losses come into play if a taxpayer's losses > $500,000 (MFJ) and $250,000 (all others.) Losses that exceed these thresholds are carried forward to succeeding years as net operating losses subject to these same limitations.
The purpose of this new section is to spread out the benefit of a gigantic loss over two or more tax years which may have been generated by the new unlimited deduction for depreciation, among other things. It also reduces the tax sheltering of profitable businesses and other income types like wages, dividends, capital gains, and rents.
If your business loss that utilizes the 100% write off of your sparkling Model X is less than the thresholds mentioned above, you have nothing to worry about. But if you have other non-passive businesses that throw off large losses, then you probably need to take a close look at Section 461 and seek out professional advice before you crank up the TurboTax and navigate this particular minefield.
Now I will just return to my corner. . . . .
Since I do not know anyone's personal situation on this thread, what I am to share may not be applicable. But tax laws are weird, and many of the subtle points get overlooked by overzealous taxpayers who think that they have found the Holy Grail.
The TCJA slipped in a new code section, Section 461. Section 461 addresses "excess business losses." Excess business losses are defined as losses (exclusive of the passive rules under Section 469) from flow-through entities like partnerships, S Corporations, and Schedule C self-employment from business or profession. These losses come into play if a taxpayer's losses > $500,000 (MFJ) and $250,000 (all others.) Losses that exceed these thresholds are carried forward to succeeding years as net operating losses subject to these same limitations.
The purpose of this new section is to spread out the benefit of a gigantic loss over two or more tax years which may have been generated by the new unlimited deduction for depreciation, among other things. It also reduces the tax sheltering of profitable businesses and other income types like wages, dividends, capital gains, and rents.
If your business loss that utilizes the 100% write off of your sparkling Model X is less than the thresholds mentioned above, you have nothing to worry about. But if you have other non-passive businesses that throw off large losses, then you probably need to take a close look at Section 461 and seek out professional advice before you crank up the TurboTax and navigate this particular minefield.
Now I will just return to my corner. . . . .
I am a newbie here who is also considering MX. I have a few questions that I think were not previously answered.
- If we buy a new/used MX and use it for 60% business use, the first year deduction under Section 179 will be limited to 60%. For subsequent years, can we still deduct the remaining percentage?
- My wife is a real-estate agent and generates about $30K annual income. That will also limit our deductions this year to $30K. If we decide to claim 100% deduction this year, could the remaining amount be used over next few years until we have fully covered the cost of MX or does the next year deduction depend on the percentage business usage in those years?
- Is there any distinction (other than the EV credit) in buying a new vs old MX? My understanding is no as long as the car is new to us.
Uncle Paul
Well-Known Member
The tax credit availability is determined by your taxable profits, not your gross income. If you make no profits, you can take no credits.
Wondering the price diff. between business insurance vs. personal coverage. Also the DMV car registration fee diff.
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