• LinkedIn
  • YouTube
  • Twitter
  • Facebook
  • Google+

Pick Up Tax Savings for Your Pickup

by on
in Small Business Tax,Small Business Tax Deduction Strategies

Q. I have a pickup truck that I initially used for personal driving. If I use the truck for business now, do I figure deductions based on the original cost? A.R.P., Cincinnati

A. No. When you convert a personal asset such as a car into a business asset, the depreciable basis equals the lesser of its fair market value or its adjusted basis. Say that you bought the truck for $20,000 and added $5,000 in improvements to make it suitable for business use. If the truck is currently valued at $15,000, your depreciation deductions are based on the $15,000 figure, not $25,000. Tip: Although the limits are slightly higher than the amounts allowed for luxury cars, tax law also caps the annual deduction allowed for vans and light-duty trucks. For 2006, the limit is $3,260, which you must reduce by the percentage of personal use.

Like what you've read? ...Republish it and share great business tips!

Attention: Readers, Publishers, Editors, Bloggers, Media, Webmasters and more...

We believe great content should be read and passed around. After all, knowledge IS power. And good business can become great with the right information at their fingertips. If you'd like to share any of the insightful articles on BusinessManagementDaily.com, you may republish or syndicate it without charge.

The only thing we ask is that you keep the article exactly as it was written and formatted. You also need to include an attribution statement and link to the article.

" This information is proudly provided by Business Management Daily.com: http://www.businessmanagementdaily.com/7263/pick-up-tax-savings-for-your-pickup "

Leave a Comment