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One item not yet discussed - a hybrid Wrangler will have a GVWR of 6000+ pounds, qualifying it for a big tax giveaway: Section 179

ElHobbz

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Don't you also have to be able to show that the vehicle is being used for a necessary business purpose other than commuting?
Does YouTube content count?
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JandS

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Don't you also have to be able to show that the vehicle is being used for a necessary business purpose other than commuting?
The vehicle must be used for business in the first year. Getting to work counts, if you own the business.
 

Jehovasfitness

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The TL;DR of 179 is that, if you own a business, you can (for all practical purposes) depreciate the entire purchase price immediately. That means if you pay $60,000 for the vehicle, you get to use it as an immediate $60,000 expense.

This alone will sell quite a few of them.
Maybe you or others can help.

I file taxes via TurboTax and honestly tax stuff confuses me. the 179 makes sense to me, but here's my situation.

Bought a 2018 for $47k and past 3 yrs used for business and used depreciation amounts of 9k, 9k, and 6k. Not using IRS 179 since below the GVWR to qualify.

My latest filing shows depreciation basis of $30k.

I can sell it to Carvana now for $48k. I'd put that towards a 4xe and use IRS 179, new cost would be $62k after taxes for the 4xe at the dealer.

to figure out how much selling to Carvana and getting the new 4xe can anyone help?

Would I use the depr basis of $30k and subtract that from the sales price to Carvana of $48k?

So let's say $62k IRS 179 would give me tax break of 62k-18k from above, or what amount would I use based upon my 2018 being depreciated for 3 yrs with depr basis of 30K... hope that makes sense
 

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DOOKEY

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Jehovasfitness

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Let me know if you find a CPA who gives out info for free. :)
haha, fair point. Figured it was a simple answer for a pro.

I don't mind giving simple professional responses with my expertise... detailed stuff gonna cost ya

yet another reason I ditched accounting after 2.5 yrs in college
 
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JandS

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Maybe you or others can help.

I file taxes via TurboTax and honestly tax stuff confuses me. the 179 makes sense to me, but here's my situation.

Bought a 2018 for $47k and past 3 yrs used for business and used depreciation amounts of 9k, 9k, and 6k. Not using IRS 179 since below the GVWR to qualify.

My latest filing shows depreciation basis of $30k.

I can sell it to Carvana now for $48k. I'd put that towards a 4xe and use IRS 179, new cost would be $62k after taxes for the 4xe at the dealer.

to figure out how much selling to Carvana and getting the new 4xe can anyone help?

Would I use the depr basis of $30k and subtract that from the sales price to Carvana of $48k?

So let's say $62k IRS 179 would give me tax break of 62k-18k from above, or what amount would I use based upon my 2018 being depreciated for 3 yrs with depr basis of 30K... hope that makes sense
Do you want to know how you're supposed to do it, or how everyone does it instead? There are a lot of reasons Biden is trying to hire a bunch of IRS agents to increase tax collections. One of those reasons is that the IRS has no mechanism to enforce 179 tomfoolery.

My FIL buys a new King Ranch every year and 179s the entire purchase price. The IRS simply doesn't track what happens to the asset after year 1, nor do they police whether it is used solely for business.

BTW, I love the fact that Carvana is still overpaying for cars. I understand used prices are uniquely high, but Carvana is crazy. Gave us $27,700 for our 2012 Wrangler Rubicon (Crush 6sp) with 80,000 miles on it. We bought it for $34,000. $6,300 in depreciation in 80,000 miles and 9 model years is batshit crazy. Then they listed it for $23,000.
 

Jehovasfitness

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Do you want to know how you're supposed to do it, or how everyone does it instead? There are a lot of reasons Biden is trying to hire a bunch of IRS agents to increase tax collections. One of those reasons is that the IRS has no mechanism to enforce 179 tomfoolery.

My FIL buys a new King Ranch every year and 179s the entire purchase price. The IRS simply doesn't track what happens to the asset after year 1, nor do they police whether it is used solely for business.

BTW, I love the fact that Carvana is still overpaying for cars. I understand used prices are uniquely high, but Carvana is crazy. Gave us $27,700 for our 2012 Wrangler Rubicon (Crush 6sp) with 80,000 miles on it. We bought it for $34,000. $6,300 in depreciation in 80,000 miles and 9 model years is batshit crazy. Then they listed it for $23,000.
haha wow, yeah, Vroom actually is offering me 48k, paid 47 for it.. Carvana IIRC is at 43k same as Carmax
 

MaskedRacerX

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We've got a message into my BIL who's a CPA, he does both our personal and biz taxes, we work out of the house but have "off site clients", umm, I'll post his findings.

BTW, I love the fact that Carvana is still overpaying for cars. I understand used prices are uniquely high, but Carvana is crazy. Gave us $27,700 for our 2012 Wrangler Rubicon (Crush 6sp) with 80,000 miles on it. We bought it for $34,000. $6,300 in depreciation in 80,000 miles and 9 model years is batshit crazy. Then they listed it for $23,000.
Yeah, we were going to sell Carvana/Vroom/Carmax, we had our '18 DD/RT come off of lease, I read about the killer used offers, ran it through those systems, and based on the residual, they were $7K-8K more, excellent so we start the process, but THEN find out that since our lease end was < 30 days, they can't buy it - but we could, so we did a cash end-of-lease purchase, and just waiting for the title before we start the process again, so +hopefully+ those used car values will stay elevated until we can sell it.
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