Can i use Section 179 for large equipment and truck

Question

Hello,

I own a home building business and we’re are trying to get more write offs. Currently many large equipment tract loaders, bobcats, Excavtors, etc are offering 0% financing for 5-6 years. Using section 179 would we be able to write off the entire cost of the equipment for 2020. So just say to make things simple tax is 30%, equipment cost $100,000,

Would we be able to write off $100,000, essentially saving 30k in taxes. Also can this be used for trucks as well? Thanks

Michael Plaks · Answer

@Tate Blackmon

If you buy a $100k machine and deduct it, reducing your taxes by $30k, then you bought a machine for $70k. In other words, you simply bought it at a discount. The point is to not buy anything you would not have bought otherwise. Only if you need it, and you need it now.

Another point is that if you later sell this machine for $40k, you will have $40k taxable income.

Jake Hottenrott · Answer

@Tate Blackmon - In short you could potentially section 179 the equipment and the vehicles (there are some restrictions). Depending on profitability, tax rates (Future rate projections), cash flow, etc. that might make a better case for the best course of action for your business.

Ashish Acharya · Answer

The Sec 179 has some limitations such as it cannot create loss for the business.

You can achieve the same deductions with bonus depreciation.

Yes for trucks if they are full-length bed trucks, otherwise there might be some limitations based on the weight.

Can i use Section 179 for large equipment and truck

Can i use Section 179 for large equipment and truck

Most Popular Reply

3 Replies