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economic stimulus credit

jeanninepoling
Level 1

taxpayer is a Uber driver and bought in 2018 a luxury for 65000  SUV that he uses 65% for bus, is he entitled to 100% special depreciation for 2018 (including sec 179} subject to bus use

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IntuitJim
Employee
Employee

Jeannine, thanks for joining our Community! As IronMan recommended, complete the ProSeries depreciation worksheet and mark business use as 65%. If it is a luxury auto (less than 6,000 pounds), then the luxury auto limit will be $18,000 * 65%=$11,700. If not a luxury auto, then 65% of the basis of the auto $65,000 = $42,250 is eligible for 100% bonus depreciation.

Caution: you can elect not to use bonus depreciation and take a smaller deduction for 2018. While your Uber driver may be happy with a full write off in 2018, they may not be as happy in 2019 if they have $0 deduction….so consider the multi-year implications.   Thanks for using ProSeries!

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Terry53029
Level 12
Level 12

from IRS: Changes to depreciation limitations on luxury automobiles and personal use property
The new law changed depreciation limits for passenger vehicles placed in service after Dec. 31, 2017. If the taxpayer doesn’t claim bonus depreciation, the greatest allowable depreciation deduction is:
$10,000 for the first year,
$16,000 for the second year,
$9,600 for the third year, and
$5,760 for each later taxable year in the recovery period.
If a taxpayer claims 100 percent bonus depreciation, the greatest allowable depreciation deduction is:
$18,000 for the first year,
$16,000 for the second year,
$9,600 for the third year, and
$5,760 for each later taxable year in the recovery period.

IRonMaN
Level 15

But the deduction is more lucrative if the vehicle is over 6000 pounds.  Why don't you load the asset into the asset entry worksheet and see what you get with that business use percentage?


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JimmyM
Employee
Employee

The special depreciation allowance (SDA) is limited by business use %. For instance, if the auto has a maximum SDA of $18,000, the allowed amount on the return will be $11,700 if the business use percentage is 65%. 

IntuitJim
Employee
Employee

Jeannine, thanks for joining our Community! As IronMan recommended, complete the ProSeries depreciation worksheet and mark business use as 65%. If it is a luxury auto (less than 6,000 pounds), then the luxury auto limit will be $18,000 * 65%=$11,700. If not a luxury auto, then 65% of the basis of the auto $65,000 = $42,250 is eligible for 100% bonus depreciation.

Caution: you can elect not to use bonus depreciation and take a smaller deduction for 2018. While your Uber driver may be happy with a full write off in 2018, they may not be as happy in 2019 if they have $0 deduction….so consider the multi-year implications.   Thanks for using ProSeries!

Jerry1010
Level 1

How  do i elect out of special depreciation allowance for an asset category in ProSeries?

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sjrcpa
Level 15

@Jerry1010  Try asking this as a new question under ProSeries.

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