Any Accountants Out There???

[Nancy]

If you are asking what I think you are asking, the answer is yes, there are provisions for the Section 179 deduction and 30% bonus depreciation using Form 2106, as well as taking accelerated depreciation.

When you say accelerated deprecation, do you mean the Section 179 expense deduction and the bonus 30% depreciation? If so, I'd like to clarify some terminology first.

Accelerated depreciation the the declining balance method I posted about earlier in this thread. That's the MACRS thing: Modified Accelerated Cost Recovery System. The Section 179 deduction and the 30% bonus depreciation are distinct things from that. So you have three things:

1. Depreciation which can be accelerated with the declining balance method or can be straight-line depreciation. Note that if you use the standard mileage rate you are automatically deemed to have not elected to use MACRS.

2. The Section 179 deducution for expensing straight away certain otherwise depreciable assets.

3. The new bonus 30% depreciation.

You're biggest issue is that to take the Section 179 deduction and the 30% bonus depreciation on a vehicle, it must be used more than 50% for business use.

However, what I am unsure of is this:

So-called scheduled property has the limitation that unless it is used more than 50% for business, it is not eligible for Section 179 and bonus depreciation. Passenger vehicles as normally thought of are scheduled property. But that's always spoken of in the context of those vehicles that have a Gross Vehicle Weight Rating of 6,000 pounds or less and, among other things, have that total depreciation limitation in any one tax year to which the H2 is not limited.

So my own question is this: If the H2 is not a passenger vehicle subject to the depreciation limitations since it has a GVWR in excess of 6,000 pounds, it is also not considered scheduled property? If not, then it may not be restricted to the business use test of greater than 50% in order to take 179 and 30% bonus.

It's an academic question and I will get an answer. It's an unusual circumstance considering the combination of factors, but certainly not bizarre, so I'm quite curious about that.

Give me a few days. (You actually have a year to get the answer since it's 2003 already and is not affecting your decision about whether or not to buy). I've been out of town for a few days, need to get caught up then I'll see what I can find out. No promises one way or the other.

Nancy

"They that can give up essential liberty to obtain a little temporary safety deserve neither liberty nor safety." -Benjamin Franklin, 1759