Hello.
Yes, it applies to used vehicles.
sources:
"Does the vehicle have to be purchased new or can it be a used
vehicle? Thanks
Bruce Thee: There is a section 179 deduction of $24,000. To qualify
the vehicle has to have a GVW of 6000 lbs or more. And, it has to be
used for business. It doesn't make any difference if it's used or
not."
source: USA Today - Chat
http://www.usatoday.com/community/chat_03/2003-02-07-thee.htm
"... the expanded 'Section 179' may allow you to deduct the entire
purchase price in the year of purchase of a new or used vehicle that
has a gross vehicle weight rating (GVWRs) of over 6000 pounds and that
is used 100% for business. If the vehicle is used less than 100% but
over 50% for business, the deduction may still be allowed but only at
the business use percentage."
source: Moss-Adams
http://www.mossadams.com/industries/dealerservices/bizvehicles.htm
"...New or used "heavy" SUVs, pickups and vans used more than 50
percent for business qualify for the extra-generous $100,000 Section
179 allowance. "Heavy" is defined as a vehicle with a gross vehicle
weight rating above 6,000 pounds."
souce: PA Chamber of Business & Industry: June 2003 Advocate Tax
Issues
http://www.pachamber.org/CP/Newsletters/Advocate/taxes/june_03.asp
'Dear Tax Talk:
"Does the sports utility vehicle tax deduction apply if you are buying
a qualifying used SUV in 2003? Or does it only apply to new qualifying
vehicles purchased this year?
Greg
Dear Greg:
I presume the tax deductions you refer to are the write-off allowed
for business use of certain heavy SUVs, such as Hummers as discussed
in this Bankrate.com article. The deduction is referred to as the
Section 179 deduction and applies equally to new or used property." '
source: BankRate.com Tax Talk
http://www.bankrate.com/brm/itax/tax_adviser/20030708a1.asp?prodtype=itax
" if you purchase and put into service a vehicle over 6,000 pounds
weight by December 31 (heavy SUVs such as Suburbans, Expeditions,
Navigators or heavy trucks), you are eligible for full 179 deduction
to $24,000, 30 % additional depreciation and 20% of the balance of
basis as regular first year depreciation, since their depreciation is
not subject to limitations. This applies to new or used qualifying
vehicles. "
source: FielderCo Tax Action Guide
http://www.fielderco.com/taxactionguide.html
"Don't neglect to look into the tax breaks available for buying
certain new or used "heavy" SUVs, pickups and vans used more than 50
percent for business. They qualify under the $100,000 Section 179
allowance. "
source: Entrepreneur.com
http://www.entrepreneur.com/mag/article/0,1539,309967,00.html
-----------
The specific parts of the Internal Revenue Code that answer the
question are Sections 179 and 280F.
"(1) Section 179 property
For purposes of this section, the term ''section 179 property'' means
any tangible property (to which section 168 applies) which is section
1245 property (as defined in section 1245(a)(3)) and which is acquired
by purchase for use in the active conduct of a trade or business. Such
term shall not include any property described in section 50(b) and
shall not include air conditioning or heating units."
http://www4.law.cornell.edu/uscode/26/179.html
Section 179 general language of "any tangible property... which is
acquired by purchase for use in the active conduct of a trade or
business" makes no distinction between used & new property.
See these
"Unlike the bonus depreciation allowance which can only be taken on
new property, Section 179 expense may be taken on either new or used
property."
source:
http://www.gbasys.com/newtaxact.htm
"Whether property is new or used is irrelevant to Section 179. What
matters is that the election must be made in the year the asset is
placed in service."
source: financial-planning.com message board
http://www.financial-planning.com/wwwboard13/messages/2257.html
---------
Section 280F coordinates with Section 179 to place limits on certain
vehicles that can be deducted under 179.
However, the key here is how 280F defines "passenger automobile."
"(5) Passenger automobile
(A) In general
Except as provided in subparagraph (B), the term ''passenger
automobile'' means any 4-wheeled vehicle -
(i) which is manufactured primarily for use on public streets, roads,
and highways, and
(ii)which is rated at 6,000 pounds unloaded gross vehicle weight or
less."
http://www4.law.cornell.edu/uscode/26/280F.html
Here's a good explanation of how Sections 179 & 280F work together:
"Passenger vehicles purchased and used in an active trade or
business can qualify as section 179 property. However, the deduction
allowable under section 179 for most passenger vehicles is limited by
the amounts specified in IRC section 280F. These specified amounts are
considerably less than the maximum deduction under IRC section 179
which is $25,000 for taxable year 2003 and thereafter. The limitation
imposed by IRC section 280F applies to "passenger automobiles" as
defined in such section. An automobile with a gross vehicle weight in
excess of 6,000 pounds, however, falls outside the definition of
"passenger automobile" in section 280F, and so is not covered by the
depreciation dollar caps contained in section 280F. Several large
sport utility vehicles have a gross vehicle weight over 6,000 pounds,
therefore removing these vehicles from the section 280F limitation and
permitting a taxpayer to expense up to $25,000 of the cost of
purchasing such large vehicles in the first year of service."
source: New York State memorandum
http://www.budget.state.ny.us/pubs/executive/fy0304articleVIIbills/revenue_memo.html
Thus, by defining "passenger automobile" as having "6,000 pounds
unloaded gross vehicle weight or less," the depreciation limits of
section 280F simply do not apply to vehicles weighing 6,000 or more.
Hence, the general provisions of Section 179 would apply, and, again,
there is nothing in Section 179 that requires property to be "new."
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search strategy:
suv deduction, "6000 pounds"
"179 deduction", "new or used"
"section 179", "section 280F"
I hope this helps. |
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