Posted by John K Haslach, CPA, MST on November 02, 2004 at 11:28:59:
Take a look at the Regs at this site.
Taxable income includes more than just the income from a single trade or business. For example, if you have a Schedule C loss (which may have you believe you cannot take a Sec 179 loss), but you also have W-2 wages, you can use you can take the Sec 179 loss to the extent of your wages.
New tax law for 2005, 6000 lb+ vehicles - Posted by Davey IL
Posted by Davey IL on October 23, 2004 at 23:20:42:
Hey all,
It has come to my attention that there is going to be some tax law changes involving 6000 lb gvw vehicles. I believe at this time there is a one time $100,000 deduction. Does anyone know what the proposed changes are going to be? Also if there is going to be changes, should I purchase a new vehicle this year, or wait until next. I understand this is probably a stupid question but, I really didn’t do any business this year. My fault.
What do you think would be the smart play?
Thanks
Still Have Bonus Depreciation in 2004 - Posted by Diane (TX)
Posted by Diane (TX) on October 31, 2004 at 16:59:08:
Bill is right about the limit being lowered to $25,000. However, bonus depreciation still applies in 2004, but doesn’t apply in 2005. According to one analysis I saw, you could write off about $45K of a $100K vehicle if purchased in 2004, versus something like $35K if you purchased in 2005.
Wages count as a trade or business income for purposes of the trade or business limitation Dave mentioned. However, you must also use the vehicle over 50% for self-employment use for the benefits to really kick in. If you wouldn’t have that level of use, hold off on until next year.
Too late - rule changed last week. - Posted by Bill Bronchick
Posted by Bill Bronchick on October 25, 2004 at 12:17:08:
The $100k cap was quietly reduced back to $25k by Congress and signed by Bush into law. So much for “tax cuts for rich”.
Re: New tax law for 2005, 6000 lb+ vehicles - Posted by Dave T
Posted by Dave T on October 24, 2004 at 13:43:25:
The allowed expense is UP TO $100K but only against income earned by an active income activity. Furthermore, the expense can not be greater than your business’ net income. In other words, the special allowance can not result in a loss from business operations.
If you had no net Schedule C income, then put off buying that large SUV until your business is more successful.
Re: New tax law for 2005, 6000 lb+ vehicles - Posted by JOHN K HASLACH, CPA, MST
Posted by JOHN K HASLACH, CPA, MST on October 25, 2004 at 15:35:03:
Read the Regs under Sec 179. It also includes income other than Sch C income.
Re: New tax law for 2005, 6000 lb+ vehicles - Posted by Dave T
Posted by Dave T on October 30, 2004 at 10:01:52:
John,
I read the regs and they limit the Section 179 deduction to an active trade or business activity. In the absence of a business entity, what other form besides Schedule C would I use to report income from an active trade or business?