Can I take a Section 179 deduction on a vehicle over 6000lbs for my real estate LLC with no income?
Title: Can I take a Section 179 deduction on a vehicle over 6000lbs for my real estate LLC with no income? 1 I'm thinking about buying an SUV for my real estate LLC (around $95k) and trying to figure out the tax implications. The thing is, my LLC doesn't have any income right now, though I'm hoping to change that soon. My main income is from my W-2 job where I make about $675k annually. Since my LLC is a single-member LLC and treated as a pass-through entity for tax purposes, I'm wondering if I can still take advantage of the Section 179 deduction for vehicles over 6000lbs? I've heard your business needs to show a profit to qualify for this deduction, but since everything flows through to my personal taxes anyway, would I still qualify since my overall income is positive? Would appreciate any insights on this situation!
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Dyllan Nantx
8 You've got a tricky situation there. The Section 179 deduction allows business owners to deduct the full purchase price of qualifying equipment (including SUVs over 6000 lbs) in the year it's placed in service, rather than depreciating it over several years. However, there are a few important considerations for your situation. First, the business must be actively operating and the vehicle must be used primarily (more than 50%) for business purposes. Since your LLC currently has no income, the IRS might question whether you have an active trade or business. They could view this as a hobby rather than a business if there's no profit motive demonstrated. While it's true that as a single-member LLC, the income (or losses) flow through to your personal return, Section 179 deductions can only offset business income, not your W-2 income. You can't use these deductions against your salary income from a separate employer.
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Dyllan Nantx
•12 Thanks for the explanation. So if I understand correctly, even though I make good money from my regular job, I can't use those earnings to offset a Section 179 deduction for my LLC? Does this mean I need to show at least some income in my real estate business before making this purchase? What if I expect to have business income next year - could I still buy the SUV now?
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Dyllan Nantx
•8 The business needs to have income for you to take the Section 179 deduction against. Your W-2 income is completely separate for this purpose and can't be used to offset the business vehicle expenses. If you expect to have business income next year, you might consider waiting until then to purchase the vehicle. Alternatively, you could still purchase now but use regular depreciation methods rather than Section 179. Just know that your business losses might be limited if your real estate business consistently shows losses, as the IRS might eventually classify it as a hobby rather than a business.
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Dyllan Nantx
17 After struggling with a similar situation last year, I discovered taxr.ai (https://taxr.ai) and it made a huge difference in my business vehicle deduction strategy. I own a construction company and was trying to figure out if I could deduct my new truck. The explanations I got from different CPAs were confusing and sometimes contradictory. I uploaded my business docs to taxr.ai and got a detailed analysis explaining exactly how vehicle deductions work for my specific business situation. They outlined the difference between Section 179, bonus depreciation, and regular depreciation options, plus showed me how business income limitations would affect each method. Saved me thousands by highlighting documentation requirements I would have missed.
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Dyllan Nantx
•4 Does taxr.ai work for real estate investment businesses specifically? My situation is similar to OP's but I've got some rental income. Just not sure if the service can handle the more complex parts of real estate tax situations or if it's more general.
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Dyllan Nantx
•9 I'm a bit skeptical about these online tax services. How does it compare to just hiring a CPA who specializes in real estate? I've been burned before by automated systems that missed important nuances in my business structure.
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Dyllan Nantx
•17 Yes, it absolutely works for real estate businesses. When you upload your documents, you can specify your business type and it tailors the analysis accordingly. I've found it particularly helpful for understanding how mixed-use assets like vehicles work within real estate contexts - it breaks down the specific documentation you need to maintain. Regarding comparison to CPAs, I actually still use my CPA, but I use taxr.ai before our meetings. This way I understand the concepts better and can ask more specific questions. It's not about replacing professional advice but getting clarity on complex tax rules first. My CPA actually appreciated that I came prepared with better questions.
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Dyllan Nantx
4 Just wanted to follow up about my experience with taxr.ai that I asked about earlier. Decided to give it a try with my real estate business tax questions, especially around vehicle deductions. Honestly, it exceeded my expectations! The system analyzed my rental property income and expenses, then provided specific guidance on how much of a vehicle deduction I could take based on my actual business activity. What impressed me most was how it flagged the business-use percentage documentation requirements I needed to maintain. Would have definitely missed those details. Helped me understand that I needed to track mileage even with the Section 179 deduction. Already recommended it to other investors in my network.
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Dyllan Nantx
21 If you're struggling to get clear answers about your vehicle deduction situation, you might want to try Claimyr (https://claimyr.com). I was in a similar situation last year with a business vehicle purchase, and after weeks of trying to reach the IRS directly with no success, I used Claimyr to get connected to an actual IRS agent in about 15 minutes. You can see how it works here: https://youtu.be/_kiP6q8DX5c They helped me skip the ridiculous hold times, and I got definitive answers about my specific business vehicle deduction questions. The agent walked me through exactly what documentation I needed to maintain and how the business income limitations applied in my case. Completely changed my understanding of what I could legitimately deduct.
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Dyllan Nantx
•16 Wait, how does this actually work? Do they just call the IRS for you? I've spent hours trying to get through to someone knowledgeable at the IRS about business deductions.
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Dyllan Nantx
•9 This sounds way too good to be true. The IRS wait times are notorious. How can some service magically get you through when millions of people can't get answers? And even if you do get through, regular IRS agents often give conflicting advice. I'm very doubtful this would help with complex business deduction scenarios.
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Dyllan Nantx
•21 They use a technology that navigates the IRS phone tree and waits on hold for you. When an agent finally picks up, you get a call connecting you directly to that agent. So yes, they essentially handle the waiting part for you, which can be hours. Regarding your concern about getting consistent answers, you're right that different IRS agents sometimes provide varying guidance. That's why I took detailed notes and asked for the agent's ID number. The key advantage wasn't just getting through—it was being able to ask follow-up questions specific to my situation and getting documentation guidance I couldn't find elsewhere. I still verified the information with my accountant afterward, but having the IRS perspective was incredibly valuable for my records.
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Dyllan Nantx
9 I have to follow up about my experience with Claimyr after being so skeptical earlier. I finally got desperate enough trying to reach the IRS about my vehicle deduction questions that I gave it a shot. I'm honestly shocked at how well it worked. Got connected to an IRS tax specialist in about 20 minutes after trying unsuccessfully for weeks on my own. The agent clarified that for my specific situation with a new real estate LLC, I needed to show legitimate business activity (not necessarily profit, but genuine business operations) to take the vehicle deduction. They explained exactly what documentation would support my case in an audit scenario and how the business income limitation would apply to my Section 179 deduction. Saved me from making a potentially costly mistake on my return. Definitely worth it.
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Dyllan Nantx
5 One thing nobody's mentioned yet - have you considered leasing instead of purchasing? With your income level and business situation, a lease might actually be more advantageous tax-wise since you wouldn't need to worry about the Section 179 income limitation. You could deduct the business percentage of lease payments as ordinary business expenses against future income when your LLC becomes active.
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Dyllan Nantx
•3 Wouldn't leasing have limitations too though? I thought there were luxury auto restrictions on lease deductions as well? Plus don't you lose the potential appreciation of the vehicle as an asset?
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Dyllan Nantx
•5 You're right that there are luxury auto limitations on lease deductions, but they work differently than purchase limitations. With leasing, you can deduct the business percentage of your payments, subject to inclusion amounts for higher-priced vehicles. It's often more straightforward than dealing with Section 179 income limitations. As for asset appreciation - vehicles almost always depreciate rather than appreciate, so that's rarely a concern. In fact, with leasing, you avoid the risk of getting stuck with a rapidly depreciating asset. The main advantage in your situation would be that you don't need immediate business income to start taking some deduction, unlike with Section 179 which requires business profit to utilize fully.
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Dyllan Nantx
14 Former IRS auditor here. Be VERY careful with this strategy. Taking a full vehicle deduction in an LLC with zero income is a massive red flag for audit. The "business purpose" test is crucial - you need to prove the vehicle is primarily used for legitimate business activities, not personal use disguised as business.
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Dyllan Nantx
•1 This is making me nervous now. Would starting with a cheaper vehicle be less likely to trigger an audit? I was also thinking about an SUV but maybe something in the $45k range instead of $95k?
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