Question

Norm placed in service a new sports utility vehicle (SUV) on October 12, 2018, for $78,000....

Norm placed in service a new sports utility vehicle (SUV) on October 12, 2018, for $78,000. The SUV has a gross vehicle weight of 6,200 lbs. It is used 100% of the time for business and it is the only business asset acquired by Norm during 2018. Compute the maximum depreciation deduction with respect to the SUV for 2018.

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Answer #1

Section 179 allows small businesses to write off the entire price of a qualifying asset from its revenue to ascertain the taxable income of the small business provided the cost of acquisition of such is asset is below $3,500,000. In this case since the purchase price of SUV is only $78,000 and since SUV has been used entirely for the business purposes it is a qualifying asset thus, the business will be allowed to write off the entire amount of $78,000 for the year 2018.

Thus, $78,000 is the maximum amount of depreciation deduction with respect to the SUV for 2018 shall be allowed.

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