Business Tax Question

[justintyme8303]

What are your CPAs telling you on new vs used when buying trucks trailers and other equipment which is best later for tax deductions?

Buy or lease?

[justintyme8303]

And if anyone knows a good CPA that knows the trucking industry feel free to share their info.

[Leemo]

Buying is can be a single deduction which falls under section 179, might have limitations though, depreciation will fall into place
Leasing, 100% right off monthly, or however occurred
Pick your poison

[Johnny_Dodson]

New law on equipment is 100 percent deduction in the year purchased, no depreciation. Great advantage


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[justintyme8303]

New law on equipment is 100 percent deduction in the year purchased, no depreciation. Great advantage


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So if I buy/finance a 60k truck and a 20k trailer I have a 80k deduction?

[jnd1959]

As long as the truck is a truck and not a light duty pickup. Has to be placed in service this year to get the deduction this year. Look at net income over the next few years before you decide. If income will be substantially higher and you are not a regular corporation, may be worth more next year. If income will be fairly stable take deduction in current year. But above all, purchase for economic reasons first, then consider tax benefits if purchase decision is close.

[Ryan C]

So if I buy/finance a 60k truck and a 20k trailer I have a 80k deduction?

Yes. This is how I grew my business. At the time, I think we were only allowed to take 50 percent bonus depreciation on new equipment. That keeps me working with the equipment and not working on it, ideally. I did buy stuff just for write offs. My accountant and most others diasagreed with me but it’s worked great so far. The draw back is if/when you sell something outright. Book value will be really low or zero then you have to recapture capitol gains or whatever.

I think this year I will skip buying equipment and pay some tax in preparation for selling out in the future. Pay me now or pay me later, they’ll get their money. Just depends what phase of growth you’re in at the time.