Question

vehicle section 179 deduction

Forum|Forum|1 year ago
January 17, 2025
2 replies
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I purchased a new luxury vehicle for my business in 2023. It is an SUV under 6000 lbs. It is used 100% for business being depreciated over 5 years. In 2023, I was allowed to take a 179 deduction in the amount of $20,200. For 2024, Turbo Tax calculates my deduction as $3185. It is my understanding that I should be permitted to deduct $19,500 in year 2. I have spoken with the tax expert at Turbo Tax and was advised to list the additional $16,315 unused depreciation as Section 179 carryover from 2023. However, I do not believe this is technically carryover, as it is not indicated as such on my 2023 return. Thank you in advance.

A

AmeliesUncle

Did you elect OUT of Bonus depreciation? If not, the program is likely correct.

Based on your amount of $3185, was your Basis of the vehicle approximately $49,719 (give or take a few dollars)?

J

joemarteauAuthor

Thank you. I did not elect out of bonus depreciation, to the best of my knowledge. My remaining basis for depreciation in the vehicle is $49,771. Original cost basis was $69,971, with $20,000 depreciation taken in the first year.

So the program is correct? I thought my remaining depreciation schedule in year 2 would allow me to deduct up to $19,500?

J

joemarteauAuthor

In addition, I used the 200% DB-HY method indicated on my 2023 form 4562, which I understand typically accelerates depreciation. Thus, with $49,771 remaining as my depreciable basis, shouldn't my deduction for 2024 be closer to or hit the $19,500 cap? Not $3,185?

P

PP 12

Hi Did anyone finally figure this out. I am in the same boat :

My auto is < 6000 lbs and only used for business. I took section 179 in 2023 along with bonus depreciation resulting a depreciation of $20200. However, for 2024, turbotax is only calculating $2297 which is way below what the limits are. What am I missing ? Any help would be greatly appreciated.

Thanks,

J

joemarteauAuthor

Hi all, I am the original poster. For what it's worth, I input my numbers into H&R Block and it seems like it is letting me take the proper deduction in year 2. I cannot speak to whether this is correct or not at this point, but I tend to think there may be an issue with the TT online program.

P

PP 12

Thank you for the response. This is incredibly frustrating as I have been using TT for a while and would have preferred using TT platform. May I ask if you went with H&R or did you somehow forced the right amount using TT ? How is it that no one from TT has fixed this.

Thanks