Quote:
Originally Posted by red-beard
Well, I'm glad to see that if I buy a truck, we can write it off in the 1st year. I better do this while I can. I think we will be buying a truck this year.
I still will be leasing the BMW.
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We buy our trucks and write them off in 1-3 years depending on other tax components. Then we also write off actual expenses. Fuel has been the big variable. Also, since trucks don't depreciate as much as cars, they are actually worth keeping. Be careful in how you move them out of the business (sell, or transfer ownership) because if you depreciated the truck to zero then sell it two years from now for $15K, you have a gain. Or if you sell it to someone in your family for $1 you can raise red flags.
But we lease our cars. It's much cleaner accounting and a better deal.
You can purchase 70,000 extra miles @ 10 cents/mile for a $7000 lower residual ($7000 more write-off) and buy it at the end in your personal name for a really deflated price then sell it and it's not a business gain
Some lease companies allow you as low as a $1 residual for this reason. Equipment leases often work this way.
BTW, my father who is a prominent tax accountant and multiple business owner also leases his cars and buys his trucks.
PS: Your example of 09/07 F150 vs 3 series is also skewed by the fact that the 2007 BMW is still 'current' where the 2007 F150 is the 'old' bodystyle and that makes a BIG difference in their resale values.