So I’m strongly considering a Model X. Has anybody taken advantage of Section 179 and if so can you go into more detail on how it worked out? Also can the tax credit of 7500 be used along with the accelerated depreciation from section 179
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Section 179 + Federal Tax credit combined?
- Thread starter Jayskywalker21
- Start date
Ostrichsak
Well-Known Member
I replied to your Section 179 question in the other thread but since you started a new dedicated thread on this topic I'll put the same reply here:
You should really research these massive cap cost depreciation deductions and the gains paid downstream if you ever realize a "profit" compared to the deductions you took claiming it was worth less than it really was. The reality is that the IRS will get their money at some point and this "loop hole" isn't quite the boon that many believe it is. It saves on taxes short term but can impact your tax situation negatively long-term depending on income brackets and such.
I'm no tax expert but I have a lot of friends who played that depreciation game that are now trying to sell off assets and running into big headaches trying to offset gains they now owe due to the "profit" they'd see based on the depreciation they claimed previously. All I'm saying is to look into all aspects as I feel many times tax experts can get too focused on the now and what is owed this year for tax liability and tend to lose sight of the bigger financial picture.
You should really research these massive cap cost depreciation deductions and the gains paid downstream if you ever realize a "profit" compared to the deductions you took claiming it was worth less than it really was. The reality is that the IRS will get their money at some point and this "loop hole" isn't quite the boon that many believe it is. It saves on taxes short term but can impact your tax situation negatively long-term depending on income brackets and such.
I'm no tax expert but I have a lot of friends who played that depreciation game that are now trying to sell off assets and running into big headaches trying to offset gains they now owe due to the "profit" they'd see based on the depreciation they claimed previously. All I'm saying is to look into all aspects as I feel many times tax experts can get too focused on the now and what is owed this year for tax liability and tend to lose sight of the bigger financial picture.
Section 179 is now limited to $28,900 for the model x, unlike past years where the full purchase price could be immediately depreciated. So with the requirement that the first year be 100% documented business use (for the full deduction) and the following years at least 50% documented business use, not sure it is the great deal it was in the past.
Combined that with the recapture or tax required when you sell the model x (at ordinary income tax rates), it probably is more headache than it is worth for most folks. Overly simplified answer from a non-professional so guaranteed to be partially or completely wrong due to the complexity of section 179...
Combined that with the recapture or tax required when you sell the model x (at ordinary income tax rates), it probably is more headache than it is worth for most folks. Overly simplified answer from a non-professional so guaranteed to be partially or completely wrong due to the complexity of section 179...
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If you have a business, take the bonus depreciation not section 179. Bonus depreciation is an accelerated business tax deduction. Rather than depreciating a large asset over the course of its lifetime, you write off a large chunk of the purchase price in a single year. From 2017-2022, the bonus depreciation was 100% of the purchase price. Starting in 2023, it’s 80% times your business use. The remaining 20% is deducted over the next few years. Next year in 2024, this number decreases to 60%.
I have an accountant who told me you can purchase the car in my name, another said it needs to be on the name of your corporation.
I have an accountant who told me you can purchase the car in my name, another said it needs to be on the name of your corporation.
Is there any benefit of the vehicle is used for work: example, outside sales rep whom puts 25,000-30,000miles on per year? We have a car stipend, but some guys who drive 2500series trucks also write mileage off in addition to the car allowance? Or just buy an X and enjoy the instant $7500.00 off at time of purchase? This is way out of my wheelhouse, and have no knowledge of alleged tax breaks?
