2017 Last-Minute Year-End Tax Deductions for Existing Vehicles

As the end of the year approaches, I want to explain how your vehicle may be able to provide you with big tax savings. There are various actions you can take, so examine the strategies described below and see if you can take advantage of any of them.

Just keep in mind that all actions must be completed before midnight on December 31, 2017.

Take Your Child’s or Spouse’s Car and Sell It

If you gave your old business vehicle to your child or spouse to use, then consider selling it before the end of the year. Your old business vehicle could have a big tax loss embedded in it, in which case your strategy is easy. Take the vehicle and sell it to a third party before December 31 so that you have a tax-deductible loss this year.

Replace Your Vehicle

If you’re considering replacing your business vehicle, then how you should proceed depends on whether it would sell for a gain or loss.

If the sale would result in a gain (i.e., the fair market value is greater than your underappreciated basis), it’s better to trade in the car for a different one so that it’s considered a tax-deferred Section 1031 exchange. This will allow you to avoid the taxes on the gain if you sell the vehicle.

If you prefer to sell the vehicle outright, you should engage a Section 1031 exchange intermediary in order to do so (rather than trade it in) and then buy a replacement vehicle. The exchange intermediary charges a fee and does the paperwork that makes this happen, resulting in no taxable gain this year.

If the sale would result in a loss, then you should sell the vehicle so you can benefit from this tax-deductible loss in 2017.

Put Your Personal Vehicle in Business Service

Now that lawmakers have reinstated bonus depreciation for 2017, you can use this as an effective strategy to get a big deduction. If you or your spouse owns a vehicle that you purchased new and never deducted for tax purposes, you can convert that personal car to business use to take advantage of bonus depreciation.

As long as you make the conversion by December 31, you get a deduction for bonus depreciation, which can be as much as half the fair market value on the date of conversion, depending on the vehicle.

 

 

Hello, we are IRS Tax Resolution company 911 Tax Relief and we've helped thousands of clients solve their IRS problems for over three decades. We've learned a lot of secrets over the time helping people that you may be able to use to help resolve your tax problems once for all. We call them secrets because the IRS really does not want you to know about them for fear of them collecting less money from you. Don't take offense to this but "The less you know about your rights, the better for the IRS." You can learn these secrets by downloading our free eBook now.

STEPS TO CLAIM YOUR FREE TAX GUIDE NOW.

1. Watch Video.

2. Download this exclusive FREE report (for a limited time) by clicking on the link below.

DISCOVER THE SECRETS ON HOW TO FIGHT THE IRS AND WIN!

Arrow-PNG-HDLearn about the IRS Fresh Start programs helping thousands of Americans

Arrow-PNG-HD     Find out how these programs may be able to save you money

Arrow-PNG-HD     Get all the information in just minutes!

Download-FREE-Report

No Comments Yet.

Leave a comment