question about depreciation

[psm127_dad]

If I purchase a truck this year, when can I start taking depreciation? I thought that as long as I took possession by Dec 31, I could take depreciation, but have been told by my tax man that he "likes" to have the truck on the road a full quarter before taking depreciation.... Is he being overly cautious?

 

[usafk9]

I say yes. I'm not a tax preparer.

 

[Murraycroexp]

Get another opinion or two. I can't remember. That's was only discussed a few minutes at tax time with our accountant.

 

[Fkatz]

Hi, Sorry for the delay in getting back to you, but I was out of town the week after you wrote this question about depreciation. Depreciation is taken from the day that you actually put it into service and used for your business. A cargo Van is allowed the standard mileage deduction for as long as you own it. and it is not depreciated at all. A Straight truck is depreciated over a period of either 3 years with a 4 year life, or 5 year with a 6 year life. it depends on how long you decide to actually keep the truck, Normally it 3 years, it is depreciated at Straight Line depreciation depending on the Month it is put into service. a Tractor is depreciated over 3 years with a 4 year life. If you trade in a truck of the same kind, you can do a like kind exchange and not pay capital gains tax until you purchase a new truck after the current one you bought. once you decide which depreciation you decide to use, you cannot change, except from mileage to actual expense. on a cargo Van, all others must take actual expenses. fuel, insurance , etc. If your tax preparer doesn't take the depreciation when it is acceptable then he does not know the tax industry and is playing it safe, so he doesn't get in problems with the IRS. which basically will not happen. Don't forget that any deposit that you pay down on the truck is taken as a 179 deduction and fully deductible, and the balance is depreciated.[h=1][/h][h=1]Franklin Katz, RTRP, ATP, PA, PB[/h][h=1]Frank's Tax & Business Service[/h][h=1]315 E. King St[/h][h=1]Kings Mountain, NC 28086[/h][h=1]704-739-4039 [/h][h=1]E-Mail: [email protected])[/h][h=1]Web: www.prep.1040.com/frankstax[/h][h=1][/h][h=1] IRS Circular 230 Notice: Unless expressly stated otherwise inthis
transmission, any tax advice contained herein, forwarded with or attached to
this message was not and is not intended to be used, nor may it be relied
upon or used, by any taxpayer for the purpose of (1) the avoidance of any
tax-related penalties under the Internal Revenue Code or applicable state or
local tax law provisions, or (2) promoting, marketing or recommending to
another party any tax transaction or tax-related matters that may be
addressed herein.

[/h][h=1][/h][h=1] [/h][h=1] [/h]