Level 2

Vehicle depreciation

Forum|Forum|3 months ago
March 10, 2026
3 replies
2 views

I have a S-Corp client who owned two personal vehicles and used them 100% for business in years prior to 2025. In August of 2025 they legally transferred ownership of both vehicles from personal to the business. Are they eligible for section 179 deduction for 2025?

IRonMaN

Level 15

Don't you have to actually "purchase" something to qualify for section 179?

Slava Ukraini!

E

easybooksAuthor

Level 2

I thought so as well, but found that "When a shareholder transfers personal property (like a vehicle) to their S-Corp, it is treated as a capital contribution under Section 351."

If that is true I should be able to take section 179 deduction; right?

IRonMaN

Level 15

Capital contribution means an addition to equity - the other side of your journal entry when the vehicle was transferred into the corp.

Slava Ukraini!

sjrcpa

Level 15

There used to be an anti churning type rule that said you couldn't claim 179 in this situation. Don't know if there still is.

Also, what's the basis of the vehicles? If used 100% for business they were probably depreciated, or deemed depreciated by the depreciation factor in the cents per mile reimbursement amount.

And they get transferred in at FMV, not original cost.

Why did he do this?

The more I know the more I don’t know.

rbynaker

Level 13

See IRC 179(d)(2). I think you fail both (A) and (C) so no 179.

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