Does anyone know for certain if purchasing a Ridge in 2005 qualifies for that govt. tax break on light trucks? Does that break still exist?
lowrider90 said:My 2006 weighs in at 6050, which meets the 179 depreciation limit set be the feds. To take advantage, first seek advise of a pro, but the basics are:
you must Purchase and register in your company name, (cannot be an individual)
you must be a corporation, LLC, LLP and a couple of others I think.
I'm not sure that a sole proprietership can take advantage of this.
Must register as a commercial vehicle as well.
the great thing is that not only can you depreciate the full purchase price, $30,000.00 in my case. but every penny you put into this vehicle is also a busness expense,(like the purchase of accesories and gas and tires... ETC, I just order the bed mat For 189.00, I'll expense that.
Right off the bat the truck only cost me $20,000.00 assuming a 30%tax bracket
This is a very basic idea, so first thing to do is call the accountant.
Did they make a 2005?
Oh yah!, All those heavy SUV's can only depreciate 25,000 of there heafty 40-50, 000 purchase price. Because our Ridgeline is a truck, not an SUV you can depreciate the entire cost, buy two, you can depreciate up to $100,000.00 machinery.
ozarkhawk said:You can use this deduction even f you are a sole prop. - as long as you are self employed and use itemized deductions (schedule C) on your tax returns. Other Realtors in my office have done this, and I was strongly considering it as my main reason for buying a Ridge.
However! Like all good things, it isn't all roses. First of all, you are giving up the right to any depriciation expense in later years. Second, if you sell the truck somewhere down the road, you have to repay the taxes on the amount you sell the truck for.
It is an incredible deduction in the year you buy - I would have reduced my tax bill over $4800 this year. But after knowing that I would have to keep the truck for at least 7-8 years as a busines vehicle, and not get any vehicle deductions during this time period, I decided against.
I would still call your accountant.