Bonus Depreciation on Purchase Of Leased Vehicle

TCJA Has Hurt Small Business Owners

The Tax Cuts and Jobs Act (TCJA) has offended small business owners in several ways.

But the TCJA has also provided some significant tax savings, one of which we want to highlight now.

The good news is that tax reform has added two new provisions and had allowed you to claim bonus depreciation on the purchase of a vehicle you’re leasing.

Want to learn how to take advantage of this substantial tax break?

Our fact-filled article can help you in three ways:

1. Review some important history.

Before the TCJA, your purchase of the vehicle you were leasing didn’t qualify for either Section 179 expensing or bonus depreciation. But times have changed, and your deduction possibilities have increased significantly. But remember, however, Section 179 expensing is available on both used and new property, you may not use Section 179 cost for the purchase of the vehicle you lease.

2. The new rules on bonus depreciation.

The TCJA made two significant changes that make the further 100-percent bonus depreciation available on the vehicle you currently lease and now purchase. What’s more? It doesn’t matter if you buy the vehicle during the lease term or at the end of the lease.

3. The technical reasons why the new bonus depreciation is available.

To put it, during the lease, you had no depreciation interest. And now, thank goodness, bonus depreciation is available on the used property. We’ll explain everything in detail.