Section 179 and Luxury Vehicles

[Coffee PRN]

Has anyone actually used section 179 on a luxury vehicle or know someone that has? Would love to get a Lamborghini Urus at a discount that outweighs depreciation. Sounds too good to be true and would love to hear some stories from people who have actually done it.

The downside is word would probably get around very quickly at my job and I can probably expect not to get any more pay increases...

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[aneftp]

It’s only 31k section 179 section ? Plus 60% bonus deprecation for 2024. Works out to another a real time 15-16k tax benefit conduct a 200k suv.

 

[ToKingdomCome]

What is section 179?

 

[aneftp]

What is section 179?

For self employed. It’s mainly used for suv and truck deductions if the gross weight is over 6000 pounds.

It changes over the years how much u can deduct.

The massive change was 2003 when they closed the “hummer loophole” where everyone was buying 100k suvs.

To put it bluntly, the Hummer Loophole of Section 179 basically allowed small business owners write off 100% of heavy equipment purchases

Now you can only write off a certain percentage of “heavy equipment purchse”

 

[chessknt]

Think about how you would defend that in an audit instead of taking sdn tax advice. Your anesthesiology work Lambo? Like you think a judge or an auditor would look at that and agree it's legit?

 

[Dr. Rude]

Think about how you would defend that in an audit instead of taking sdn tax advice. Your anesthesiology work Lambo? Like you think a judge or an auditor would look at that and agree it's legit?

Sure. I need to be able to get to the hospital quickly in the event of a STAT C-section.

 

[aneftp]

Think about how you would defend that in an audit instead of taking sdn tax advice. Your anesthesiology work Lambo? Like you think a judge or an auditor would look at that and agree it's legit?

due to the closure of the hummer loophole. The section 179 deduction has less value

That’s why many people find leasing cars for business better deductions.

People think I’m shady here. There are way more elaborate tax (legal schemes) as self employed that I don’t even do but many big business and even self employed docs do.

Remember, you are a CEO when you own the business.

You are not just a locums doc. You own a million dollar corporation. Your company can do business with its EIN. It can take out loans, buy cars, buy stocks, buy other businesses. Those that see themselves as 1099 employees miss the bigger picture.

 

[Coffee PRN]

due to the closure of the hummer loophole. The section 179 deduction has less value

That’s why many people find leasing cars for business better deductions.

People think I’m shady here. There are way more elaborate tax (legal schemes) as self employed that I don’t even do but many big business and even self employed docs do.

Remember, you are a CEO when you own the business.

You are not just a locums doc. You own a million dollar corporation. Your company can do business with its EIN. It can take out loans, buy cars, buy stocks, buy other businesses. Those that see themselves as 1099 employees miss the bigger picture.

Can you expand on why leasing a vehicle comes out to be better value please?

 

[chessknt]

Get a CPA and see what they think since they have actually been through IRS audits I stead of the people here who have this imaginary tax plan that will get shredded like toilet paper if the IRS ever gets funded enough to function.

 

[SRYSPAC]

Has anyone actually used section 179 on a luxury vehicle or know someone that has? Would love to get a Lamborghini Urus at a discount that outweighs depreciation. Sounds too good to be true and would love to hear some stories from people who have actually done it.

The downside is word would probably get around very quickly at my job and I can probably expect not to get any more pay increases...

I have a friend that used it to purchase an X5 and write it off but it's for legitimate use and 100% for their travel to/from locums gigs. The Lambo you're describing probably isn't even heavy enough to qualify, and I'm sure you won't be driving it for your business.

 

[coffeebythelake]

What is the hummer loophole?

 

[aneftp]

What is the hummer loophole?

It expired in 2003. It gave free reign on unlimited tax deductions for big suv for section 179 deductions without any limits

Everyone was buying super expensive SUV like hummers for 80-100k at
That time and writing off the entire 100k purchase

So they killed the hummer loophole by 2004. And limited the amount you can deduct

 

[aneftp]

I have a friend that used it to purchase an X5 and write it off but it's for legitimate use and 100% for their travel to/from locums gigs. The Lambo you're describing probably isn't even heavy enough to qualify, and I'm sure you won't be driving it for your business.

No one uses x5 for 100% of business. Let’s be real here. I have 2 cars. I sold my Range Rover but I probably used it less than 100% of the time when I had it wink wink.

 

[finalpsychyear]

No one uses x5 for 100% of business. Let’s be real here. I have 2 cars. I sold my Range Rover but I probably used it less than 100% of the time when I had it wink wink.

My CPA says don't be the 90-100% business use guy unless you are tracking it legit. For most people 75-80% and you should still be tracking it still. Some posts claimed they bought their car on dec 30 and left it parked at the work site directly from the dealership in some way to justify 100% deduction. If im the irs I'm probably more interested in the 95-100% peeps than something more reasonable but what do i know.

 

[aneftp]

My CPA says don't be the 90-100% business use guy unless you are tracking it legit. For most people 75-80% and you should still be tracking it still. Some posts claimed they bought their car on dec 30 and left it parked at the work site directly from the dealership in some way to justify 100% deduction. If im the irs I'm probably more interested in the 95-100% peeps than something more reasonable but what do i know.

My dentist friends are smooth as butter on this. Dentist who own their own practice are by far the worst violators of tax shielding

They register their business cars and register at the actual dentist office as official record. Run everything through the business and claim 100% car use.

 

[finalpsychyear]

My dentist friends are smooth as butter on this. Dentist who own their own practice are by far the worst violators of tax shielding

They register their business cars and register at the actual dentist office as official record. Run everything through the business and claim 100% car use.

Good to know that these are the 1% who will likely get the audit flags and those that try and owe close to 0 tax by having excessive deductions. My CPA is married to a former tax agent and says its beyond stupid how many of what you quoted above are out there plus people making 1m but somehow having 950k in overhead. Thats a large part of where the money is for them but even then they have to pick and choose since not enough funding. Big corps are a waste for them due to too much legal support and the little guy is not worth it.

 

[Status Sciaticus]

I realize you cant deduct the commute to work, but can you deduct work to work travel? For example traveling from one place of business (office) to second place of business (home office). technically it isnt a commute and if your LLC has some online business that is conducted from home, wouldnt that fly?

 

[MirrorTodd]

I realize you cant deduct the commute to work, but can you deduct work to work travel? For example traveling from one place of business (office) to second place of business (home office). technically it isnt a commute and if your LLC has some online business that is conducted from home, wouldnt that fly?

Fairly certain that's allowed.