Section 179

[Lobstakilla]

I have a question in regards to section 179 and looking for advice from any tax professionals on the board.

We are opening a business around Dec 8th and will be purchasing a model x to use as a 75/25 business and personal car. I assume I will take delivery before December 31st and I know I will not have a huge tax obligation this year due to only being open a few weeks before the year closes out. If I utilize section 179 can I carry forward and tax savings since I won’t use it this year?

Mahalo for any help!

 

[Uncle Paul]

Eligibility is determined by the date the vehicle is "Placed in service".

Order date, production date, etc do not matter, but the first day it is used by the company.

Not sure about the carry forward, but doubt it.

If you wish to use the deduction in 2018, hold delivery until next year.

 

[nrigali]

I'm not a CPA but mine told me that you can only deduct up to how much you owe in taxes and no more. I believe the same applies to the tax credits so if you don't owe at least 10k you will be missing out on big tax credits based on my understanding.

You should obviously talk to a professional but you may want to hold off on delivery until 2018, assuming your tax burden will be high enough that it makes sense to take the credits and 179 deductions.

 

[gjunky]

Not a CPA either but we were told, and are going to, carry the credit forward into this year (purchased last year and only taken a small credit). Sorry, I don't have any specifics.

 

[LyftupX]

Not a pro but discussed it with one.
You can only sec 179 up to the net business income you have, other income does not count.

Remaining amount can be carried over to the next year .

 

[Adityarad]

Please check with your CPA but i understand that the 50% bonus depreciation goes away on dec 31 this year then is reduced for 2018

 

[Skidmark]

Found this, but I'm not sure if it's current - 26 CFR 1.179-3 - Carryover of disallowed deduction.