Section 179 Taxes

[LOMartin]

Couldn't find anything with a search.

Does section 179 apply to private ownership of tractors?

I just bought my Kubota, well i'm making payments to kubota on it.

I don't have a business using this tractor and i;m using to clear and build my house.


Thanks for the help everyone. The deadline is a week away!!!

 

[skeets]

What is 179?

 

[D2Cat]

Better check with a tax specialist, but I think that is for quicker depreciation for a small business. So first off, you have to have a business, and use the item in the business, to qualify for the shortened depreciation.

 

[Tropical Jack]

As D2 says, Section 179 of the Internal Revenue Code provides for an alternative for depreciation by allowing an expense deduction in the year of purchase of a business asset. You must be engaged in a business activity in order to deduct depreciation or elect to take a Section 179 deduction.

Jack

 

[Cathy Liebchen]

no business= business deduction.

 

[LOMartin]

As expected, just needed confirmation.

Thanks all for the quick reply.

 

[Jchonline]

Nothing requires you to have articles of formation or a formal business charter to participate in a 179. What you do need is to participate in business activities. So if you as a private owner started selling firewood as an alternate source of income and you used the tractor 50% of the time to support that work, you could deduct 50% of the tractor purchase on your personal 1040 tax return.

If you buy the tractor and use it exclusively for private use (ie no income from its use) then you cannot deduct. As mentioned, best to speak to an accountant for details.

 

[Tropical Jack]

I’m sorry, but this is just bad advice. The OP has already stated that he is not engaged in any business activity. Yet you seem to be encouraging him to fabricate a business. This could result in potential tax fraud and increased audit risk. It is fine if you want to risk tax fraud and tax audit risk; but it is unwise to encourage others.

Just my 2 cents - tempered with the fact that I was a CPA in a former life (or at least it was long enough ago that it seems like a former life).

Jack

 

[SidecarFlip]

Sounding like 'Monkey Business' to me.....

 

[Poohbear]

Couldn't find anything with a search.

Does section 179 apply to private ownership of tractors?

I just bought my Kubota, well i'm making payments to kubota on it.

I don't have a business using this tractor and i;m using to clear and build my house.


Thanks for the help everyone. The deadline is a week away!!!

You can deduct the interest if you can exceed the standard deduction but not the cost of the tractor.
The 179 is a BUSINESS deduction and not a personal owned equipment/tool deduction. I' m not a CPA but a retired business owner that used the 179 deduction For 31 years. I went thru a lot of trucks , tools,& machinery In the HVAC business.

 

[Poohbear]

Nothing requires you to have articles of formation or a formal business charter to participate in a 179. What you do need is to participate in business activities. So if you as a private owner started selling firewood as an alternate source of income and you used the tractor 50% of the time to support that work, you could deduct 50% of the tractor purchase on your personal 1040 tax return.

If you buy the tractor and use it exclusively for private use (ie no income from its use) then you cannot deduct. As mentioned, best to speak to an accountant for details.

You can be a " sole proprietor with only your SS # as your identifier but, You need to report the business income/ expenses on separate schedule form ( K IIRC ) then the profit/loss goes on the 1040

 

[Tropical Jack]

Poohbear

Personal consumer loan interest is not deductible anymore. Only mortgage interest and education loan interest is deductible as non-business interest on Schedule “A” as an itemized deduction; and only if it exceeds the standard deduction. Interest on vehicles, tractors, etc are only deductible if related to a business.

Jack

 

[Jchonline]

You can be a " sole proprietor with only your SS # as your identifier but, You need to report the business income/ expenses on separate schedule form ( K IIRC ) then the profit/loss goes on the 1040

Yes, the K-1. You can sell bead bracelets on eBay that you make in your living room and that is still a business. If you buy a table and supplies to support said business, they are business expenses and can be recorded on the K-1 and passed over to your 1040 (essentially as a deduction).

 

[Tropical Jack]

K-1 is only for partnerships. If you are a partner, your share of income is passed through to your individual tax return (1040) via K-1 from the partnership. A sole-proprietor reports on Schedule “C” of Form 1040.

Jack

 

[Poohbear]

K-1 is only for partnerships. If you are a partner, your share of income is passed through to your individual tax return (1040) via K-1 from the partnership. A sole-proprietor reports on Schedule ***8220;C***8221; of Form 1040.

Jack

Your correct. I desolved all three s-corps end of 2016 when we sold our companies & you refreshed my old memory. As to interest, I haven't had any debt in so long I don't keep up on deducts for personal, I sure miss my write offs ( trips, meals, etc. )
We have started an orchard & a vinyard and got our farm sales tax exemption but I dont use it as I have decided retirement is more fun so not adding any more trees or vines. Not big enough to make money.yes I could push the grey area as IRS says if your increasing your business size your legit .
Bottom line is OP shouldn't attempt to write off tractor, IRS makes the mafia look like choir boys in comparison. They borrowed their motto from the FAA, " we 're not happy till you're un-happy "

 

[Poohbear]

After all those years in business chasing write offs to keep from paying taxes, in retirement I have found the " dirty little secret " the IRS doesn't want you to know. It's simple, no income no taxes