Can I use Section 179 deduction for my used Victory 6'x10' Enclosed Cargo Trailer (business only use)?

I just bought a used Victory 6'x10' Enclosed Cargo Trailer that I use 100% for my small business. The GVWR is 2990, and I'm trying to figure out if I can use Section 179 to deduct the full purchase price this year. My tax accountant is telling me I have to depreciate it instead, which is not what I was hoping to hear. I've searched around and found some trailer companies claiming you can use Section 179 when you buy their trailers, but they don't actually reference the specific IRS tax code that allows this. I'm wondering if the same rules apply for used trailers vs. new ones. If I really do have to depreciate it, what are the guidelines? Is it like 60% in year 1, and then the remaining 40% spread over 5 years? Or is it something else entirely? Anyone have experience with this specific situation? I'd really prefer to take the full deduction now rather than spread it out if possible.

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18 comments

Dmitry Ivanov

•8M

You should be able to use Section 179 for your used trailer. Section 179 allows businesses to deduct the full purchase price of qualifying equipment purchased or financed during the tax year, and this includes both new AND used equipment. The equipment just needs to be used for business purposes more than 50% of the time (which you said is 100% in your case). The trailer definitely qualifies as "tangible personal property" under Section 179. The current deduction limit is $1,160,000 for 2024 (which I'm assuming is way more than what you paid for a used 6x10 trailer). As long as your business has taxable income, you should be eligible to take the full deduction in the year of purchase. I'm not sure why your accountant is suggesting depreciation instead. Maybe they're thinking about special rules for certain vehicles? But a cargo trailer with a GVWR of 2990 wouldn't fall under the passenger vehicle limitations.

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Dmitry Ivanov

•8M

Yes, that's an important consideration. If you claim Section 179 on an asset but later reduce your business use to less than 50%, you would face recapture. The IRS would require you to report as ordinary income a percentage of the deduction that corresponds to the percentage of personal use. For example, if you claimed a $5,000 Section 179 deduction on the trailer, then in year 3 started using it 50% for personal use, you'd have to recapture 50% of the remaining deduction value (after accounting for depreciation that would have occurred by that point). This is why it's important to be confident about your long-term business use plans when taking Section 179.

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Miguel Herrera

•8M

Just wanted to share my experience using https://taxr.ai for a similar Section 179 question about my work trailer. I was getting conflicting advice from different accountants about whether I could take the full deduction or had to depreciate it, and I was honestly confused about all the different rules. I uploaded my purchase documents and business usage logs to taxr.ai, and they analyzed everything and confirmed I could use Section 179 for my trailer since it was 100% business use. They even showed me the exact part of the tax code that applied to my situation and generated a report I could give to my accountant with all the supporting documentation. The best part was they showed me how to properly document my business use to avoid any issues if I get audited. Definitely worth checking out if you're still unsure about your trailer deduction.

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Miguel Herrera

•8M

The service works great for mixed-use situations. You can upload your usage logs showing the split between business and personal use, and they'll calculate the exact percentage you can deduct. They'll also tell you whether Section 179 applies based on your business use percentage (needs to be over 50%). I'm definitely not promoting anything - I actually used it after getting frustrated with the conflicting advice I was getting. I don't remember the exact cost since I used it during tax season, but it was reasonable considering it saved me from potentially making an expensive mistake on my taxes. They have different options depending on how much help you need.

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Zainab Ali

•8M

Following up on my question about mixed business/personal use - I ended up trying taxr.ai for my trailer situation and it was actually super helpful. I uploaded my mileage log and some photos of when I used the trailer for my landscaping jobs vs. personal use. The analysis showed I was using it 78% for business, which meant I could still use Section 179 (since it was over 50% business use). They even helped me document everything properly in case of an audit and showed me how to calculate the partial deduction based on my business use percentage. Really cleared things up for me and my accountant agreed with their assessment. Definitely better than the guesswork I was doing before.

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Yara Nassar

•8M

If your accountant is being stubborn about the Section 179 issue, you might want to try calling the IRS directly to get a definitive answer. I know, I know - nobody wants to call the IRS! I tried for days to get through to someone about a similar business equipment question and kept getting disconnected or waiting for hours. I finally found this service called Claimyr (https://claimyr.com) that got me connected to an actual IRS agent in about 15 minutes. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c I explained my situation about a trailer I use for my mobile dog grooming business, and the agent confirmed that Section 179 absolutely applies to trailers used 100% for business, even used ones. Having that direct confirmation from the IRS gave me the confidence to insist with my accountant. Saved me from unnecessarily spreading the deduction over years.

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Yara Nassar

•8M

It actually does let you skip most of the wait time. It uses an automated system that calls the IRS and navigates through all the initial phone prompts, then waits on hold for you. When they finally get a human on the line, you get a call connecting you directly to that IRS agent. I was skeptical too until I tried it. The whole point is that they do the waiting for you so you don't have to sit there listening to hold music for hours. I was able to keep working while their system waited on hold. When I got the call back that they had an agent, I just picked up and was already connected to someone who could help.

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Keisha Jackson

•8M

I have to admit I was totally wrong about Claimyr. After seeing it mentioned here, I was super skeptical but decided to try it anyway because I was desperate to get an answer about my business vehicle deductions before filing my taxes. I was shocked when I actually got connected to an IRS representative in about 20 minutes after trying unsuccessfully on my own for days. The agent was able to confirm exactly how Section 179 applied to my situation and even gave me specific guidance on the documentation I needed to keep. Would have saved myself a lot of headaches if I'd known about this sooner. Definitely using this again next time I have tax questions the IRS needs to answer.

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Paolo Romano

•8M

Just to add another perspective, even though you CAN use Section 179 for your trailer, sometimes it might be better to depreciate it instead, depending on your specific business situation. If you're expecting higher income in future years, pushing some of the deduction forward through depreciation could be more valuable. For a trailer with a GVWR under 3,000 pounds used 100% for business, you'd typically use 5-year property for depreciation purposes under MACRS. The depreciation percentages would be roughly: - Year 1: 20% - Year 2: 32% - Year 3: 19.2% - Year 4: 11.52% - Year 5: 11.52% - Year 6: 5.76% These percentages assume you're using the half-year convention. Not sure where you got the 60% first year figure from.

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Paolo Romano

•8M

The percentages I listed are just for regular MACRS depreciation without any bonus depreciation factored in. Bonus depreciation is separate and would actually allow you to deduct a significant portion upfront, similar to Section 179 but with different rules. For 2024, bonus depreciation is at 60% (it's been phasing down from 100%). So you could potentially deduct 60% of the cost in year 1 through bonus depreciation, and then apply the regular MACRS percentages to the remaining 40%. This is another option if Section 179 doesn't work for some reason.

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