These are always a part of my conversation with accountants on personal or business tax issues:
No you can't. Yes, we can. No you can't. Yes we have.
No you can't. But we have. No you can't. But I read it in.....
on and on and on. In the end everyone is happy and confused.

Your specialist practice is common in professional field, that is the norm among attornys, accountants and doctors; specialist is where the money is, not general practice. In some legal cases we had to go through 10+ lawyers from different firms, working together or pass onto another firm for different stage of legal works, seek out 2nd opinion or more aggressive alternatives.

Mac,

And at least 90% of the time, "yes you can" is the right answer. Just have to know some obsure provision not commonly known or structure something in a different way that gets to the same end-result but has a different tax impact. The other 10$ of the time it's uninformed or idiot advice and you're lucky if you don't get thrown in jail thanks to the moron!

I think specialization is more common in the legal and medical professions than accounting but it is certainly there also. What's more unusual about me is not that I have a speciality, but what that speciality is. Very narrow indeed.

Good luck with your tax-effect on your new Hummer!

Nancy

Dear Nancy (catchy name for an 'ask' forum)

Thanks again for the concise info....just to show my appreciation AND respect for you, we will forgo the typical initiation/induction to our forum and (what the heck) even waive the required picture of you in a bikini that is requisite for new members. [img]/infopop/emoticons/icon_wink.gif[/img] [img]/infopop/emoticons/icon_biggrin.gif[/img]

Course, we stopped the bikini-pic requirement after Heehaw sent in his pic of such. sheesh: that pic warped my fragile little mind. [img]/infopop/emoticons/icon_eek.gif[/img] [img]/infopop/emoticons/icon_eek.gif[/img] [img]/infopop/emoticons/icon_eek.gif[/img]

Nancy, thank you for all the info. I just spoke to my CPA and because of you I'll save a ton-o-green!! Next time you and yours are field testing the new H2 in the Tampa area let me know and dinner is on me. This is a great forum due to folks like you that freely exchange ideas and information with all of us. Thanks again. BTW where is your firm located? Van

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Vaka Humm:
Nancy, thank you for all the info. I just spoke to my CPA and because of you I'll save a ton-o-green!! Next time you and yours are field testing the new H2 in the Tampa area let me know and dinner is on me. This is a great forum due to folks like you that freely exchange ideas and information with all of us. Thanks again. BTW where is your firm located? Van<HR></BLOCKQUOTE>

Van,

Glad to have been of help. As I posted before, I despise the US tax system so I get no greater thrill than when helping people use it (legally) to their advantage.

In the small world department, me and mine LIVE in Tampa. Our accounting firm is right outside the downtown area. How's that for coincidence?

We are often in Boca Grande..have dear friends who have a place there. So you may just have to come through on that dinner. The Temptation is my all time favorite restaurant. It definately has the best fried soft shell crabs in the world. No matter where we go, when we order soft shells, we always compare them to the Temp's. As of yet, none have measured up.

Enjoy paradise down there. And do start the year with a Boodles and tonic in the bar at the Temp for me.

Hmmm...I wonder if we already know each other?

Nancy
p.s. Say hello to Buck. He's down there now.

Great! Nancy, The Temptation, I'll remember that, love hard to find soft shell crab. We will be in Tempa mid April on business at Marriott Waterside. Never been in Tempa. I spent hours on the web searching for some neat small hotel, instead of usual concrete block big hotel, but not knowing what is what and where is where, I gave up. On last trip to San Antonio, I found the Menger next to Alamo, that was a lot more fun than Hyatt. Will the taxi know about The Temptation?

Mac,

Boca Grande is almost two hours south of Tampa. You definately do not want to go by taxi.

If you like fishing, Boca is THE place for it so you may want to get a rental car and spend some time there. The Gasparilla Inn is where you should book for a stay down there.

The Marriott Waterside is quite nice even if it is a larger hotel. I can't really think of any small, quaint hotels in town.

I can give you some Tampa restaurant recommendations. As April approaches, let me know what your preferences are and I will send you a list.

Nancy

Nancy, I haven't been to that restaurant but it sound great lets set it up. email me at vakatwo@yahoo.com I get down there about every weekend but I'll be there for ALL of Tarpon season, April, May and June . Maybe when Mac is down we can get togeather.
Mac, if you have time it would be worth it to come a little south of Tampa and visit some of the last unspoiled part of Florida on the west coast, not only Boca but also a little village of Punta Gorda (thats where my vacation house is that is going through some remodling)
PS Nancy do you and yours do the Tarpon thing in the pass??
When we are in Tampa we like to go for sushi at the Crazy Buffet, been yet?

Mac if you like "old world style" try the Bellview Biltmore in Bellair Beach near Clearwater.
http://www.belleviewbiltmore.com/
It is the oldest wooden stucture in Florida and very classy, with a great golf corse. Are you comming for grins or biz?

Van and Nancy, Thanks for tips. The Belleview looks great and the rates are cheap compared to downtown Tampa, how far it is from downtown Tampa? driving time-wise. The map for that area has very complicated coastlines with 3 cities, Tampa, Clearwater and St.Petersburg, I did not know that. Glad I asked, instead of just jump into a Tempa taxi "The Temptation, please." only to have the taxi driver find out I am the famous Hummer idiot. It will be a business trip with details to come later. Thanks very much for the hospitality, great people on a great forum. I think we will rent a car and drive around aimlessly all over the place. If we can find a place to rent a speedboat, that will be even better, we did that in Miami Beach. We always try to go on biz trips together, that way the most boring places can be just as exciting.

Mac, it's about 30-45 mins to downtown Tampa from the Builtmore but an easy drive. Yes rent a car and explore, there is a place that even rents Harlys, Porch, Jag, Ferari Vipers etc. The Builtmore is close to all beaches, St Pete and Clearwater. As for a boats, there is all kinds of boating here, ask at the Builtmore for recomendations.

Mac,

The Biltmore is a 45 minute drive and the traffic is sometimes horrible over the Causeway. Stay at the Marriott Waterside for the business portion of your trip and then go over to Clearwater for some play days. While the Biltmore would be a good choice, ultimate play days should be spent at the Don Cesar on St. Pete Beach or at the Gasparilla Inn in Boca Grande, in my not-so-humble opinion.

If you are bringing your wife also, there are some interesting things for her to do that are easy to get to from the Marriott. She can go to Channelside and Harbour Island by foot. Ybor City, Tampa's poor but still fun attempt at duplicating New Orlean's French Quarter, is very close by with easy transportation to/from the Marriott.

Nancy

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Vaka Humm:
Nancy, I haven't been to that restaurant but it sound great lets set it up. email me at vakatwo@yahoo.com I get down there about every weekend but I'll be there for ALL of Tarpon season, April, May and June . Maybe when Mac is down we can get togeather.
Mac, if you have time it would be worth it to come a little south of Tampa and visit some of the last unspoiled part of Florida on the west coast, not only Boca but also a little village of Punta Gorda (thats where my vacation house is that is going through some remodling)
PS Nancy do you and yours do the Tarpon thing in the pass??
When we are in Tampa we like to go for sushi at the Crazy Buffet, been yet?<HR></BLOCKQUOTE>

Van,

What is Boca except about fishing in the pass?!? Love it.

I've never been to the Crazy Buffet. I am one of those typical south Tampa people they talk about who rarely travels north of Kennedy. Besides, I'm not keen on raw fish.

Make a point of going to the Temptation on Boca. It sometimes feels like the whole island is there every night. I had erroneously thought you were on the island so I guess you didn't get my references to Boodles gin and other things. Sorry about that. I wasn't even thinking about Punta Gorda, Useppa or other places right there at Charlotte Harbor. If you do go to the Temptation, have them explain the Boodles gin connection. They have some great stories about this little restaurant.

Let's explore an H2 meet when Mac is in town. Could be fun.

Nancy

[This message was edited by Nancy on January 01, 2003 at 08:56 AM.]

Anybody wanna join me for Taco Bell?

You guys crack me up!! The Hummer H2 forum convienes to discuss the finer details of geography and fine dining.

MAC, I'm sure you've answered this before, but would you mind sharing (once again?

MAC (as I was typing)...would you mind sharing with us what it is that you do for a living? Just curious

Busted!

Sorry for going off topic. Puhleeeeze don't report me. I'm new here and don't need to start out with a ticket this soon.

Steve, I just found out this little note pad on top of your own last post, when I click on it I can correct my last post. That would be nice in real life if i can rewind and unsaid a few things.

What I do is whenever any fast food joints run out of hamburger paddies, I run into the nearest phone booth to change and fly out there with fresh supply.

Thanks for the info everyone, it's most helpful. I haven't got an answer on my question of this affecting or usefulness with a new business. I will be starting a new business this spring & probably won't see any profit this year. The year will be spent mostly finalizing the product, drumming up clients, etc.

So given that, is this tax break still beneficial to me?

Thanks again,
- Dan

---------------------------------
SUT on order - 18 months to go!
---------------------------------

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Dan:
Thanks for the info everyone, it's most helpful. I haven't got an answer on my question of this affecting or usefulness with a new business. I will be starting a new business this spring & probably won't see any profit this year. The year will be spent mostly finalizing the product, drumming up clients, etc.

So given that, is this tax break still beneficial to me?

Thanks again,
- Dan

---------------------------------
SUT on order - 18 months to go!
---------------------------------<HR></BLOCKQUOTE>

In addition to carrying back losses, you can carrying them forward. So, yeah, it should be beneficial to you too once you place it into to service for business purposes.

Nancy

I haven't purchased an H2 yet but I saw mentioned the a BMW X5 would qualify?...Any truth in this? Thanks.

no

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by mambodoc:
I haven't purchased an H2 yet but I saw mentioned the a BMW X5 would qualify?...Any truth in this? Thanks.<HR></BLOCKQUOTE>

Yes.

The Gross Vehicle Weight Rating of the X5 exceeds 6,000 pounds. Look inside your door jamb and you will see the exact GVWR of your X5.

Of course, you have to be eligible for the deductions in the first place. If you are, the X5 purchase will enjoy the same tax benefits as the H2.

Nancy

"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -Benjamin Franklin, 1759

Nancy-

I thought I read where the X5 was only 4800. However, I could be wrong, being that I was really drunk last nite when I was responding to posts...

-HUMMERDOGG

OOPS, just looked it up and it seems the X5 just gets by with a GVWR of 6000... "Hair of your chinny chin, chin..."

GVWR are listed below at this link:


http://www.gonecamping.net/stories/tow_ratings.html

Sorry mambodoc for leading you astray. Hopefully this tax deduction doesn't influence your decision between H2 and X5...

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by HUMMERDOGG:
Nancy-

I thought I read where the X5 was only 4800. However, I could be wrong, being that I was really drunk last nite when I was responding to posts...

-HUMMERDOGG<HR></BLOCKQUOTE>

LOL! Friends don't let friends give tax advice when drinking.

I think the X5 is a few hundred pounds over the required 6,000.

Nancy

"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -Benjamin Franklin, 1759

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by HUMMERDOGG:
OOPS, just looked it up and it seems the X5 just gets by with a GVWR of 6000... "Hair of your chinny chin, chin..."

GVWR are listed below at this link:


http://www.gonecamping.net/stories/tow_ratings.html

Sorry mambodoc for leading you astray. Hopefully this tax deduction doesn't influence your decision between H2 and X5...<HR></BLOCKQUOTE>

Those weights listed on GoneCamping are tow limits, not Gross Vehicle Weight Ratings. Two different things I thought. GVRW is roughly the curb weight (empty vehicle except for fuel) plus payload/cargo weight. But the site is not clear. Looking at the right side, they indicate they are listing GVWR. The list itself looks like tow limits. Are they in fact the same thing? I don't think so, but if the are, then the info is inaccurate, at least for the X5.

I thought the X5 GVWR was around 6,400. A woman who works for me has a BMW X5 4.4i. We just looked inside her door jamb and, sure enough, the GVWR is 6,405. It may vary slightly for the model above and the model below the 4.4i (or not vary at all) but it definately is NOT 6,000 as listed on gonecamping.net.

If the X5 was exactly 6,000 pounds it would not qualify since the GVWR must be in excess of 6,000 pounds, not 6,000 pounds or more.

Nancy

"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -Benjamin Franklin, 1759

I give up then... and to think that I thought everything I read on the internet was the truth...

teach you Dogg.

Kelley

Does anyone (Nancy?) know if the 179 depreciation applies if you file a 2106 (outside sales expense) form? I've used both the standard mileage rate and actual expense method on this form over the years and would love to be able to use the accelerated depreciation of the H2 even though my business related mileage is less than 50% of the total?
---Delivery NEXT WEEK!!!

-Dennis

If you are asking what I think you are asking, the answer is yes, there are provisions for the Section 179 deduction and 30% bonus depreciation using Form 2106, as well as taking accelerated depreciation.

When you say accelerated deprecation, do you mean the Section 179 expense deduction and the bonus 30% depreciation? If so, I'd like to clarify some terminology first.

Accelerated depreciation the the declining balance method I posted about earlier in this thread. That's the MACRS thing: Modified Accelerated Cost Recovery System. The Section 179 deduction and the 30% bonus depreciation are distinct things from that. So you have three things:

1. Depreciation which can be accelerated with the declining balance method or can be straight-line depreciation. Note that if you use the standard mileage rate you are automatically deemed to have not elected to use MACRS.

2. The Section 179 deducution for expensing straight away certain otherwise depreciable assets.

3. The new bonus 30% depreciation.

You're biggest issue is that to take the Section 179 deduction and the 30% bonus depreciation on a vehicle, it must be used more than 50% for business use.

However, what I am unsure of is this:

So-called scheduled property has the limitation that unless it is used more than 50% for business, it is not eligible for Section 179 and bonus depreciation. Passenger vehicles as normally thought of are scheduled property. But that's always spoken of in the context of those vehicles that have a Gross Vehicle Weight Rating of 6,000 pounds or less and, among other things, have that total depreciation limitation in any one tax year to which the H2 is not limited.

So my own question is this: If the H2 is not a passenger vehicle subject to the depreciation limitations since it has a GVWR in excess of 6,000 pounds, it is also not considered scheduled property? If not, then it may not be restricted to the business use test of greater than 50% in order to take 179 and 30% bonus.

It's an academic question and I will get an answer. It's an unusual circumstance considering the combination of factors, but certainly not bizarre, so I'm quite curious about that.

Give me a few days. (You actually have a year to get the answer since it's 2003 already and is not affecting your decision about whether or not to buy). I've been out of town for a few days, need to get caught up then I'll see what I can find out. No promises one way or the other.

Nancy

"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -Benjamin Franklin, 1759

Bush Proposal May Cut Tax on S.U.V.'s for Business By DANNY HAKIM

ETROIT, Jan. 20 — The Bush administration's economic plan would increase by 50 percent or more the deductions that small-business owners can take right away on the biggest sport utility vehicles and pickups.

The plan would mean small businesses could immediately deduct the entire price of S.U.V.'s like the Hummer H2, the Lincoln Navigator and the Toyota Land Cruiser, even if the vehicles were loaded with every available option. Or a business owner, taking full advantage, could buy a BMW X5 sport utility vehicle for a few hundred dollars more than a Pontiac Bonneville sedan, after the immediate tax deductions were factored in.


Consider the Hummer H1 as an example of the new deduction. It is one of the largest and most expensive S.U.V.'s, with a base sticker price of $102,581, including destination charge. Under the Bush plan, small-business owners could use all of an annual $75,000 capital equipment deduction toward the purchase; the current equipment deduction allowance is just $25,000.

That is in addition to thousands of dollars in other deductions. Under existing rules, a business could deduct 30 percent from the base price left after the capital equipment deduction, a benefit put in place as part of a post-Sept. 11 stimulus package. In the case of the H1, that would be a further deduction of $8,274.

Finally, 20 percent could be deducted from what is left, part of the business deductions available for automobiles. For the H1, that would be $3,861 more in deductions.

The total would be more than $87,000 in deductions, or about $33,500 in savings in federal taxes alone for buyers in the highest bracket. Under current rules, just less than $60,000 could be deducted.

Deals for cars and small sport utility vehicles are much less appealing. Currently, a business can deduct no more than $7,660 for a car in its first year of service, $4,900 in the second year and less in the succeeding years. The Toyota Prius, which uses a fuel-efficient blend of gasoline and electric power, is eligible for an additional $2,000 clean vehicle deduction. That means a business owner could deduct under half of the $20,500 sticker price of the Prius in the first year of purchase, for about $3,700 worth of federal tax savings for those in the highest tax bracket.

David Friedman, an engineer and analyst at the Union of Concerned Scientists, an environmental group, said the increased deduction for big vehicles was "yet another loophole that the government is keeping open that is increasing our oil dependence."

"Before, it was large enough to drive a small S.U.V. through," he added. "Now it's large enough to drive a Hummer through."

http://www.nytimes.com/ads/digitalpremium5.htm

Dear Nancy,
Thank you, Thank you, Thank you
What more can I say!

I am going to fire my accountant for not telling me about the accelerated depreciation loophole when I bought my Toyota Tundra two years ago.
I have a question for you. Can I use the accelerated depreciation on a vehicle that I bought new in year 2000? Last year I only wrote off the business use mileage on the Tundra. This year I would like to use the accelerated depreciation loop hole. Can it be done? I know that the vehicle qualifies but I don't know if the fact that I bought it two years ago matters. Also I don't know if the fact that I started depreciating the mileage last year matters. Any Ideas?

I have my eye on the H2 and am considering a future purchase. How do you like it?
Thanks
Dean

Can you deduct the intrest on your payments for the vehicle if it is used for business?

Along with either your gas cost, maintenance, etc.?



Rick


------------------
Aztek Yellow Trans Am (new)
98 Trans Am WS7
70 Ram Air IV Trans Am
Modified Goped Sport
1/10th scale HPI R/C car
1/5th scale GB R/C car
FUEL SLUT Video Archive
R/C Video Archive
Moderator at LS1.com and FUEL SLUT.com
After 7 months in the NYPD Vehicle Impound, I Finally have my Baby Back!!

The thing you have to be aware of in this whole "use the H2 as a business write off thing" is you have to use it for 100% business or you have to report your personal mileage in a mileage log which will be used against you as "compensation" on your W2 wages (fringe benefits baby).

In other words, you figure out what mileage you used it for personal use and there is a something called "business vehicle used for personal use compensation form" and you get hammered.

I am not a CPA but I own a business and use the H2 as my business vehicle. My CPA is telling me if you use it more for personal use, the business vehicle could be a tax burden.

Ask about it.

I hate to bring up old threads, but this one is definitely worth doing because of all the useful info

We're actually considering doing this right now, but we still have a few questions...

I already know that I'll be able to write off up to $36K of the price, but can this be done partially over the time of financing?

In other words, instead of writing off a full $24K the first year and $12K over the next, could we finance the vehicle for say 6 years and deduct $6k for each year?

And how about deducting interest on payments and cost of maintenance?

Oh yeah, please type s l o w....

I failed basic math in HS



Rick

Hey thre guys,
My father is a CPA and here it is as its explained to me:

Section 179 states that in the first year you can take a 100% deduction from $1.00 - $100,000.
So, you can write off your entire truck in the first year, the only catch is that it cannot create a loss. Example: Truck is worth $55,000 and your company only made a prfit of $40,000, you can only write off $40,000 in the first year. As well, if your company made higher than the total cost of the vehicle, you can write off the entire amount. If you choose not to write off the entire amount in the first year, you can write off up to $7,000 a year after that. ( But he states that those laws change frequently, and if you are able to, write off asa much as you can in the first year)

Disclaimer: This is all info that I just had explained to me by my father who is a CPA, I am not. I design and build houses, so if some of this is a little jumbled, its only because I don't speak accountant language, and am trying to decipher it the best I can.

Hope this helps. If you have any other questions I can try and help as best I can.

Kevin

2003 Pewter H2, Tire relocator, painted hard tire cover, billet gas cover, MC2 chrome hood handles, stainless bumper letters, 15% tinted front windows,pioneer nav/dvd, xm sat, headrest monitors, tv tuner, defenderworx hood latches, side vents, and marker bezels.

Bumping this to the top since I took time to write a nice reply and nobody has responded!!!

HAHAHA

Kevin

2003 Pewter H2, Tire relocator, painted hard tire cover, billet gas cover, MC2 chrome hood handles, stainless bumper letters, 15% tinted front windows,pioneer nav/dvd, xm sat, headrest monitors, tv tuner, defenderworx hood latches, side vents, and marker bezels.

I've actually been waiting for a response to your reply lol

I don't know anything about accounting, but being able to write off your entire net profit just doesn't seem right

Can someone else chime in here?



Rick

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Kevin W:
...Example: Truck is worth $55,000 and your company only made a prfit of $40,000, you can only write off $40,000 in the first year...<HR></BLOCKQUOTE>

I have a question on that. What about carrying your losses forward?

- Dan

-------------------------------------------
SUT on order since 12/02 - 10 months to go!
-------------------------------------------

<BLOCKQUOTE class="ip-ubbcode-quote"><font size="-1">quote:</font><HR>Originally posted by Dan:

I have a question on that. What about carrying your losses forward?

- Dan

<HR></BLOCKQUOTE>

Yes, you get to carry over the loss against next year. Disclaimer: I am not an accountant, consult a tax professional before acting on free advice received on web forums!
PS: there are some excellent articles on the web about this from accountants and tax professionals.