I am shopping for a truck and would like to get the best deal. I really don't need a 3/4 ton truck for my small farm, but I have been told it would be in my best interest from a tax perspective to buy one. Does anyone know the facts regarding this. Also, does anyone know of a web-site or book that I could refer to for tax saving tips? Thanks for any advice.
Truck shopping and taxes
- Thread starter Pharmer
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TexasShooter
Well-known member
I do believe it has to be at least a 3/4 ton in order to meet the requirements. Here are a couple of websites. I would talk to your accountant prior to purchase.
http://www.taxguru.org/incometax/Rates/Sec179.htm
http://www.prestigeok.com/tax_code_179.htm
http://www.taxguru.org/incometax/Rates/Sec179.htm
http://www.prestigeok.com/tax_code_179.htm
A
Anonymous
Another thought; if you have your property insured through one of the farm groups check on the difference between a 3/4 ton and a one ton with a flat bed. You may find it goes from a recreational vehicle to a farm vehicle or about half the cost.
RICHARD ADAMS
Member
it does not have to be 3/4.......it has to wiegh more than 3 tones.....wrote off 100% of Dodge Quad Cab 4x half ton last year
In MO it doesn't have to be a full sized truck, just have a farm license. I have a Ford Ranger that is in that category. First thing to do is check with your Dept. of motor vehicles and your tax assessor.
dun
dun
Dun,
If it's less than 6k, I believe you can to write off a % of how much it is used on the farm. If it's used solely as a farm truck, 100% can be written off. I guess the lawmakers thought that smaller vehicles might be used a personal vehicles as well.
We all know that farmers would not use the farm truck for anything other than farming? ;-)
The way the restrict it here is by the tag weight. They cost the same so I don't understand what the deal is, but if it's under X, not sure what X is, you can only use the truck within 50 miles of the farm and can't tow anything. If it's over X you can use it any where including out of state and tow anything you want. What the heck, the plate is only 20 bucks for 2 years whichever way you go. Actually I have the same tags on both of the trucks. The full size F-250 and the Ranger
dun
dun
Arnold Ziffle
Well-known member
I think that Dun and the rest of you are talking about two different things. For federal income tax purposes the 6,000 pound rating is the key in order to avoid the "luxury car" rules for depreciation. Virtually all full size trucks (half ton on up) are large enough to avoid the luxury car rules. The much touted $100,000 first year deduction has been greatly advertised by auto dealers, who unscrupulously avoid mentioning (or hide in very tiny print) that the 100% deductibility for tax purposes is only available if the vehicle is used 100% for business purposes. I dare say that absolutely no "part-timers" and really precious few (most probably NONE) of the full-timers could really substantiate 100% business use if they had to.
Arnold Ziffle":6j6neqei said:
i agree arnold. you better have another truck to do anything you want non-farm related. the word in our area is that dps troopers have started ticketing trucks w/farm plates pulling boats (& i'm sure they're checking diesel at that time, too). i would think the irs wouldn't look too favorably on trucks written off as full-time farm pulling campers, boats, etc.
Campground Cattle
Well-known member
http://www.txdps.state.tx.us/lw/cmvlaw/ ... n/Farm.asp
Txag you can use a farm truck in Texas for all family activties. You can not use for gainful employment
Txag you can use a farm truck in Texas for all family activties. You can not use for gainful employment
Campground Cattle":3pzumsma said:
campground,
i can't verify since that's just the rumor i recently heard. we don't have a farm plate on our truck so it's not something we have to worry about.
i'm still not seeing from the link you sent that boats & recreation are ok from the note below (& i'm not sure a boat is a necessity):
"Transporting the owner's family:
to attend church or school:
to visit a doctor for medical treatment or supplies: or
for other necessities of the home or family."
Campground Cattle
Well-known member
Txag I don't belive that to be true on a boat I might be wrong. I will have to further invetigate. If it is true their a lot of poorer ranchers in East Texas that cannot afford two or three trucks that are in trouble.
Campground Cattle":23h0h2l0 said:
you might be right. like i said, i don't know it for fact, just rumor.
on the other hand, if true, the solution to those "poorer rancher" would be to not have farm plates. also, if they're truly "poorer ranchers", how do they afford a boat? :lol:
Campground Cattle
Well-known member
Doesn't cost a lot of money for a jon boat.
J Baxter
Well-known member
What everyone is talking about is the section 179 immediate expensing deduction. Not all full size trucks will qualify for the deduction. Thye have to exceed 6000 lbs gvw on the manufacturer's tag. It is rumored around Capitol Hill that they are thinking about excluding SUVs from this.
One tidbit here. All classes of cattle qualify for the section 179 deduction not just feeders. Any of you that are ammortizing your breeding stock or waiting til they sell to take the deduction may want to examine this.
JB
One tidbit here. All classes of cattle qualify for the section 179 deduction not just feeders. Any of you that are ammortizing your breeding stock or waiting til they sell to take the deduction may want to examine this.
JB
Arnold Ziffle
Well-known member
For cattle to be depreciable (under Section 179 or otherwise) they must be breeding herd animals. Feeders generally would not qualify since they are held for resale and not members of the breeding herd, steers have a hard time being members of a breeding herd, etc.
I once had a lady, new to ranching, argue with me that some of her steers were part of her breeding herd! But earlier on she had also asked "what's the difference between a Hereford and a heifer?"
I once had a lady, new to ranching, argue with me that some of her steers were part of her breeding herd! But earlier on she had also asked "what's the difference between a Hereford and a heifer?"
Weaver
Well-known member
This was just passed in January, but in Illinois, if you buy a vehicle with a gvw of 8600+lbs., you don't have to pay the sales tax, because it then can be considered farm equipment and Illinois doesn't have sales tax on farm equipment. My dad just bought a new Chevy diesel and was real happy to take advantage of this. The only downside is you have to pay a little more for a license.
A
Anonymous
I was a tax accountant in a former life. Here's the deal:
In order to qualify for the Section 179 deduction (i.e. to deduct it in a lump sum instead of over 5 years), the vehicle must have a "Gross Vehicle Weight" in excess of 6,000 pounds. That's important, as GVW actually includes the capacity of the truck in addition to the weight of the truck. My 2004 Chevy Silverado 2500HD crew cab short bed with Duramax Diesel (for example) has a GVW of 7,200 lbs.
Most full-sized pickups qualify for this deduction. In fact, may SUV's (Chevy Tahoe, Mercedes M-Class, etc) also qualify.
It is also true that you can only deduct that portion that is applicable to business use. So, if the truck costs $30,000 and you use it for 75% business use, you can deduct $22,500 in the year you bought it.
One other thing to remember: I think you are limited in the Section 179 deduction by your total revenue for the year. So, if you only had $10,000 in revenue, you are (I think) capped at $10k in what you can deduct (you still get to deduct other business expenses, so you can show a net loss from your Schedule F (farm income & expenses). Now, I'm not sure about that as it has been a while since I was in public practice....
contact a good accountant to be sure about any of this...
-E
In order to qualify for the Section 179 deduction (i.e. to deduct it in a lump sum instead of over 5 years), the vehicle must have a "Gross Vehicle Weight" in excess of 6,000 pounds. That's important, as GVW actually includes the capacity of the truck in addition to the weight of the truck. My 2004 Chevy Silverado 2500HD crew cab short bed with Duramax Diesel (for example) has a GVW of 7,200 lbs.
Most full-sized pickups qualify for this deduction. In fact, may SUV's (Chevy Tahoe, Mercedes M-Class, etc) also qualify.
It is also true that you can only deduct that portion that is applicable to business use. So, if the truck costs $30,000 and you use it for 75% business use, you can deduct $22,500 in the year you bought it.
One other thing to remember: I think you are limited in the Section 179 deduction by your total revenue for the year. So, if you only had $10,000 in revenue, you are (I think) capped at $10k in what you can deduct (you still get to deduct other business expenses, so you can show a net loss from your Schedule F (farm income & expenses). Now, I'm not sure about that as it has been a while since I was in public practice....
contact a good accountant to be sure about any of this...
-E
