Tax advantage?

[tjhummer]

I bought a brand new H2 a few days ago... I must admit that I stretched myself to get into my dream, using recent employee discount program.. Just today someone told me about tax advantage.. I had been thinking of opening a part-time business alngside my full-time job with someone, and think it may be a good time to do it...

Can anyone confirm if this is possible, i.e. if I open a part-time business along with my full-time job, can I still reap benefit from this hummer tax advantage?

thanks... looking forward to be a part of this team...

a brand new H2 owner..
tj

[tjhummer]

I bought a brand new H2 a few days ago... I must admit that I stretched myself to get into my dream, using recent employee discount program.. Just today someone told me about tax advantage.. I had been thinking of opening a part-time business alngside my full-time job with someone, and think it may be a good time to do it...

Can anyone confirm if this is possible, i.e. if I open a part-time business along with my full-time job, can I still reap benefit from this hummer tax advantage?

thanks... looking forward to be a part of this team...

a brand new H2 owner..
tj

[TBDAugs]

I'm not sure but I thought last tax year was the last year the fedgov allowed an accelerated deduction (as much as 50%) for depreciation of your purchase as a business vehicle.

There's probably a tax discussion forum online somewhere you can ask this question, or just google on accelerated vehicle depreciation or 'unjust' tax laws for the filthy rich....

DisposableIncomeAugs

[Boss Hoss]

Do not quote me on this as i am not a cpa, but to my understanding in 2004 and previous years you could write off 100% of the purchase price of the vehicle for business use if you were self employed. This is no longer but you can write off depreciation....contact a cpa and they can tell you...if you are starting your own business you will need a cpa anyway. Hope this helps.

[HummerNewbie]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">Originally posted by Boss Hoss:
...if you are starting your own business you will need a cpa anyway. Hope this helps. </div></BLOCKQUOTE>

At least you will if you are making money

[Boss Hoss]

"but to my understanding in 2004 and previous years you could write off 100% of the purchase price of the vehicle for business use if you were self employed"

This was only for vehicle with a gvwr of 5,000lbs or more...Hummer certainly meets this criteria.

[usetosellhummer]

you can still write off the Hummer over 5 years with depreaciation as a piece of biz equipment. You must use it for your biz, no wite off for joe shmoe. If your self employed your cpa should be able to figure it out

[Brad]

04' was the last year for the big write off. You could write off I believe 36,000 at one time. I think all of that good write off is over, just your normal depreciation.

I'm not a CPA but I did stay at a Holiday Inn Express last weekend.

[tjhummer]

thanks guys for the info..

I am going to register for business next week.. will talk to cpa as you suggested... it does not matter that I register my business 2-3 weeks AFTER the hummer purchase, right?..

this is an exciting group of hummer enthusiasts.. glad to be here..
tj

[MUH_HUM]

<BLOCKQUOTE class="ip-ubbcode-quote"><div class="ip-ubbcode-quote-title">quote:</div><div class="ip-ubbcode-quote-content">I'm not a CPA but I did stay at a Holiday Inn Express last weekend. </div></BLOCKQUOTE>

Brad scores points with the funny. Nice.

Here is how I understood it with my 2003 H2:

In FY 2003 (April 04 taxes) under IRS Section 179 if you owned a business (Sub S - Corp -LLC -Sole Propr) that was your primary source of income (not a second income source) you could deduct 100% of the Hummer H2 (because of vehicle weight not company vehicle use) as machinery (H1 up to $100K). This one-time loop hole was closed in FY 2004 by congressional action.

Now under IRS Section 179 you can deduct a H2 (plus a few other vehicles that qualify by weight) up to 100% if you can show 100% use (by good documention) of the vehicle for strict and only business use. It is now a "Business Vehicle" by use and not the one-time "machinery" as it was for 2003.

I am not a CPA, but just went through this with an IRS Agent during an audit. The Agent tried to ding my 100% deduction under Section 179 (2003) because I did not have excellent documention (mileage logs - places and events) to show him I used it as a strict business vehicle 100% of the time.

But since I had placed it into service as a business owner in 2003 (purchased in Dec 2002 - delivered in Jan 2003) and it weighed over 7000 lbs, along with the one-time 2003 Section 179 wording; I told him it was a "machinery" purchase to my business and therefore did not need to document useage for business purpose in order to deduct.

Result - 100% deduction (as originally filed) of my 2003 H2 under Section 179. Please understand that this one-time loop hole is no more. But you still can deduct a H2 under Section 179 as a business vehicle in a primary business (not part-time).

Consult you CPA - Good Luck