Question

On April 6, 2017, John, a calander year taxpayer, purchased and placed in service a new...

On April 6, 2017, John, a calander year taxpayer, purchased and placed in service a new Hummer H2 (heavy SUV) for $83600 to be used 75 percent of the time in his business. What is the maximum amount that he can deduct in 2017 including Section 179 expensing, bonus depreciation, and MACRS depreciation.

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Answer #1

The SUV is a listed property because it is being used both for business and personal purposes. The SUV is eligible for the §179 expense election as it exceeds 50% (75% of the time for business purposes). The SUV is also eligible for 50% bonus depreciation as it is a new vehicle when placed in service. The tax payer can only deduct 75% of allowable deprecation being the asset used for business purpose.

In 2017, A tax payer can immediately expense up to $510,000 of the property acquired during the year.

Therefore, the maximum amount that can be deducted is $83,600.

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