"Craig Stone" <jcstone1[at]comcast.net> wrote:

- quote -

If the vehicle weights under 6000 lbs, it is subject to what
is called the 280f limit for depreciation. This limit is
MUCH below what an annual depreciation would be on a MACRS
schedule .This is why I encourage my clients to own the car
personally and set up an accountable plan whereby they turn
in a periodic report for business mileage and get paid x
cents per mile. If paid the IRS allowable (36 cents in
2003), not only is such payment deductible by the company,
the reimbursement doesn't have to be counted as income.

Vehicles of 6000 lbs or more are not subject to the 280f
limits. However, you still can only take the percentage of
business use times the depreciation.

You are required to show personal use as w-2 income and that
DOES NOT change the percentage of business use.

Mike Lewis, CPA

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If a company employee (5% owner if S Corp) uses a vehicle
less than 50% for business purpose but the personal use is
passed through on a W-2 as wages, is the company entitled to
MACRS and Section 179? In other words, is the part passed
through on the W-2 considered business for the purpose of
getting over the 50% so the company can take Section 179?
Does the answer change if the vehicle is over 6,000 pounds
GVW?

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