Section 179 deduction for heavy trucks - field entry interplay questions

Forum|Forum|5 years ago
January 11, 2021
1 reply
20 views

I have a large new truck (over 6,000 lbs) placed in service this year. As long as I choose MACRS 5 year % Vehicles over 6000 lbs, No Limits from the "Method" drop down on screen 22 I get the full cost of the truck on form 4562 Part IV (Summary)line 21 Listed property. I have to enter the cost under Current Section 179 expense in order to have the cost show under Part I line 2. Either way I get the write off in year one. What is the technical difference/interplay between the screen fields?

Also, unless I enter the amount under Current Section 179 expense the California 1=not eligible for state Section 179 {CA only} does not apply.

Thank you

Lacerte Tax

This topic has been closed for replies.

Best answer by PhoebeRoberts

Both bonus and 179 are depreciation for calculating the ordinary gain on disposition, but if they're in an entity, the K-1 presentation is different.

You can elect 179 dollar by dollar, but bonus is all or nothing by depreciable life (all your 5-year property).

The bonus depreciation rules and planning techniques changed this last year, so worth getting some continuing education on.

PhoebeRoberts

Intuit Community Champion

One is 100% bonus depreciation; the other is Sec 179. You can look at the Depreciation Schedule under Forms (you'll want the Regular, not the short version) for more detail.

L

LSTAXAuthor

Level 5

Thanks, that makes sense. Do you know off-hand if both methods would be subject to depreciation recapture at sale down the road? Also are they both all or nothing - 100%, or can you choose to depreciate more than regular depreciation but not the entire cost in one year? Say 75% this year and put the other 25% on regular MACRS?

PhoebeRoberts

Answer

Intuit Community Champion

Both bonus and 179 are depreciation for calculating the ordinary gain on disposition, but if they're in an entity, the K-1 presentation is different.

You can elect 179 dollar by dollar, but bonus is all or nothing by depreciable life (all your 5-year property).

The bonus depreciation rules and planning techniques changed this last year, so worth getting some continuing education on.

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