FYI, you don’t need to lease for the tax deduction. If the vehicle is being used primarily for work, you can straightline depreciate it over 5 years (20% per annum). Whenever you do depose it, whether 5 years or 20 years later, you simply take a capital gain on the sale price.
Edit: disclosure, I am not an accountant, so you’ll need to confirm with one.
It’s also a matter of timing and strategy. If you have good and bad years, better to take all the deduction in a good year (plus gaming tax brackets should that apply). Also money saved today is better than money saved over 5 years. Next consider that if you take 100% deduction in year one but pay the car/truck over 5 years you’re effectively cash flow positive upfront, especially if you purchase at the tail end of year 1. Think of it as an interest free loan from the IRS.
If the sale price is too far off from book value it throws up a red flag that can be a contributing factor in triggering an audit, especially when the sale is to an ‘insider’. And if you’re willing to play it fast and loose on this, you probably have a number of items that you wouldn’t want to surface in an audit.
Gotcha, thank you for clarifying.
I kept reading the term “equipment leases” in Section 179 but no details around how it actually is applied.
It sounds like the only way to take advantage of Section 179’s 100% purchase write-off in Year 1 is by purchasing the car, not leasing it.
Yes, you can’t depreciate an asset that you don’t own.
I have been reading some conflicting information regarding section 179 For businesses leasing vehicles. On the Bank of America website it states you can lease and use section 179 as depreciation and I also saw on another website regarding tax deductions.
I’m about to get a truck and want to make sure if I lease I can deduct it using section 179 as we had a really good year in business and it would be great to have a decent write off
You can apply section 179 to non-tax capital leases, which I don’t believe car leases count as. It’s something more commonly set up in heavy equipment leases, etc.
The info on the this Toyota site is beyond confusing because they’re saying I can lease and use section 179
What does your tax guy/accountant say? Nothing else matters.
I’ll have to ask.
What is your business? Certain fields like construction make it easier to write-off something like a truck versus a business where a truck is not necessary.
To clarify by easier I mean less likely to raise a red flag for audit.
For example if you own a construction business it’s easier to get away with writing off a leased truck versus a luxury car say for example a S Class.
Only your cpa/accountant can tell you what works best for your situation.
I flip houses for a living and am a general contractor so I guess I’ll have to ask a CPA
Truck should be an easy write off.
My dad transitioned from flipping to new construction and government contracts about 15 years ago but even back then him and his business partner were able to write off a couple of trucks.
Now it’s just easier to write off 2 “personal trucks via lease” and then buy new trucks for the foremen/workers every few years and write those off as a depreciating asset.
I’m trying to figure out if I can lease a truck and write off the entire cost of the truck in the first year or if I’m not gonna be allowed to do that.
You can’t do that on a lease. GO ASK YOUR CPA.
You can write off lease payments + maintenance + gas + insurance, per period, so for example 12 months worth of all of those.
But yeah talk to your cpa, your company’s income and usage may or may not be able to justify writing all of it off.
So for example even though the Tacoma isn’t rated at 6000 pounds can I get one of those over a tundra and still write off the payments etc?
I don’t think there’s any weight rating stipulations on lease write off… but again I’m not a cpa 
Why do you insist on getting an answer to a complicated tax question in a discussion forum from non-tax experts who have repeatedly ask you to contact a tax pro or CPA?
FWIW,. Below is my previous post…hope it helps.
You can write off a tricycle if it’s a legit business expense. The 6000 pound limit is for doing accelerated depreciation on a purchase. Has nothing to do with a lease.
But seriously, talk to your cpa.
