Depreciation; Purchased used 2007 St Trk

[RETIDEPXE]

Frank,

Not sure if I screwed up by not buying a new vs. buying a used 2007, 73k miles, St truck in 2008 in regards to depreciation. I am wondering;

-over how many years 'useful life' i can spread the depreciation (original buyer's in-service date; Jan 31, 2007)?
-what are my options e.i. straight line vs accelerated vs..??

I realize i cannot use the 2008 stimulus incentives as far as writing off the full amount upto i think $250k as this is for equipment purchased new only. Being that i had some large business start-up expenses for 2008, i would like to pospone greater amounts of depreciation for future year/s when my other expenses (other then depreciation) will not be as much as 2008, assuming income will be the same or greater. We are operating as a sole-proprietorship for starters.

Thanks in advance,
Doug B

 

[Fkatz]

RETIDEPXE
Junior Member


Join Date: Jan 2007
Location: Texas, USA.
Rating: Not Rated
Posts: 23
Depreciation; Purchased used 2007 St Trk

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Frank,

Not sure if I screwed up by not buying a new vs. buying a used 2007, 73k miles, St truck in 2008 in regards to depreciation. I am wondering;

-over how many years 'useful life' i can spread the depreciation (original buyer's in-service date; Jan 31, 2007)?
-what are my options e.i. straight line vs accelerated vs..??

Original in service does not pertain to you when depreciation start, but it starts the day that you put it in service as the new owner. you do not take the old owner depreciation.

You only have 1 choice straight line over 3 years, plus the deposit that you put up front. if you financed the rest, you can take the full depreciation due to the fact that you purchased the equipment and it is new to you. But that is not suggested due to no deduction over the 3 years period


I realize i cannot use the 2008 stimulus incentives as far as writing off the full amount upto i think $250k as this is for equipment purchased new only. Being that i had some large business start-up expenses for 2008, i would like to pospone greater amounts of depreciation for future year/s when my other expenses (other then depreciation) will not be as much as 2008, assuming income will be the same or greater.

Sorry, but you cannot postpone any depreciation for future use, it must be listed as depreciable asset in the year purchased and taken over the amount of years allowed.

We are operating as a sole propreitorship for starters.

Questions,
1. Are you a husband and wife team?, then operating as a sole propreitiorship is no problem

If you are not a husband and wife team, then you are not considered sole propreiptorship if you are spliting the profits and cost, you are considered a partnership and you have to file as such. or both are considered sole propreitorship and whoever the 1099 is made out to, then that person has to make a a 1099 MISC to the other person so a separate return will be filed.
I really do not know exactly what your status is , so until you let me know i can give you the exact filing requirements

Frank



Thanks in advance,
Doug B

 

[RETIDEPXE]

Thanx Frank for your reply. We are husband and wife team so sole proprietorship....i recall reading your thread in the past on this subject of filing status and answered all my Q's there. Again, thank you for all you do.

Doug B

 

[RETIDEPXE]

Just to clarify, Isn't the straight line depreciation for a Straight truck 5 yrs and Tractors 3 yrs?

thank u,
Dougb

 

[Fkatz]

Cargo vans are 5 years, straight trucks and tractors are 3 years, trailers are 6 years
it also is a prorated in the first year depending on the month that it is put in service.

So if you put the vehicle inservice in April, you would get 3/4 of a year in the first year of the financed amount. plus a 179 deduction for the deposit.
and the balance would be depreciated over the next 3 years, meaning that less say,

April 2008 to Dec 2008 9 monts 2/3
Jan 2009 to Dec 2009 1 year full
jan 2010 to dec 2010 1 year full
jan 2011 to Mar 2011 3 months 1/3

Franklin Katz, ATP,PA, CPB
Frank’s Tax and Business Service
120 York Rd
Kings Mountain, NC 28086-3151
(704) 739-4039
Fax: (704) 739-3934



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That is your 3 years.
Frank