Tax deduction may be available for work truck purchases

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Mitsubishi Fuso Truck of America Inc. issued a reminder to potential truck buyers that they may be able to find favorable tax treatment of commercial truck purchases this year. According to the U.S. Internal Revenue Code, Title 26, Section 179, a taxpayer may elect to treat the cost of any qualifying property as an expense, rather than a depreciable capital asset.

Using this tax code provision, business owners may be able to deduct the full purchase cost of a qualifying work truck (GVWR = 14,000 lb. or more), up to the $500,000 limit applicable to tax years 2010 and 2011. The deduction must be taken in the year the vehicle is placed in service.

Time is short to take advantage of this provision in 2010, but the potential benefit is large. MFTA says buyers considering the purchase of a new truck or trucks should consider the tax implications of buying this year versus postponing the purchase.

IRC Section 179 contains a number of limitations and provisions that may affect the extent to which any business can deduct any specific purchase. MFTA recommends business owners consult their own tax advisers and accountants regarding their individual situation and the applicability of IRC 179 to it.