After taking a Section 179 deduction of $10,000 on a pickup truck placed in service in 2017, can a single member LLC sole proprietorship switch to the standard mileage method in 2024?
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No, a single member LLC (sole proprietorship) that claimed a Section 179 deduction on a pickup truck placed in service in 2017 cannot switch to the standard mileage rate for that vehicle in 2024.
1. Section 179 Deduction and Standard Mileage Rate
The Internal Revenue Code and IRS guidance are clear that if you claim a Section 179 deduction or use any depreciation method other than straight line for a vehicle, you are permanently barred from using the standard mileage rate for that vehicle in any subsequent year.
- IRS Publication 463 states:
"You can claim a section 179 deduction and use a depreciation method other than straight line only if you don’t use the standard mileage rate to figure your business-related car expenses in the year you first place a car in service. If, in the year you first place a car in service, you claim either a section 179 deduction or use a depreciation method other than straight line for its estimated useful life, you can’t use the standard mileage rate on that car in any future year."
- IRS Publication 334 similarly provides:
"You cannot use the standard mileage rate if you... Claimed a section 179 deduction on the car..."
- Instructions for Form 4562:
"If you claim the section 179 expense deduction or use any depreciation method other than straight line for a vehicle, you cannot use the standard mileage rate for that vehicle in any future year."
2. Application to Your Facts
- The pickup truck was placed in service in 2017.
- A Section 179 deduction of $10,000 was claimed in 2017.
- The taxpayer is a single member LLC (disregarded entity for tax purposes, so the rules for sole proprietors apply).
- The question is whether the taxpayer can switch to the standard mileage rate in 2024.
Because a Section 179 deduction was claimed in the first year the vehicle was placed in service, the taxpayer is permanently barred from using the standard mileage rate for that vehicle in any subsequent year, including 2024. This is true regardless of whether the vehicle is still being depreciated or is fully depreciated, and regardless of any change in business structure (as long as the taxpayer is the same person for tax purposes).
3. Legal Authority
- IRC § 280F(d)(1) and related Treasury Regulations, as interpreted by IRS guidance, establish that once a Section 179 deduction or accelerated depreciation is claimed, the standard mileage rate is not available for that vehicle in any future year.
- IRS Publications 463, 334, and 225 all reinforce this rule.
4. Summary Table from IRS Publication 463
"Standard mileage rate not allowed. You can’t use the standard mileage rate if you:... Claimed a section 179 deduction (discussed later) on the car..."
5. No Exception for LLCs
The fact that the business is a single member LLC does not change the result, as the LLC is disregarded for federal tax purposes and the rules for sole proprietors apply.
Conclusion: Because a Section 179 deduction was claimed on the pickup truck in 2017, the single member LLC/sole proprietorship cannot switch to the standard mileage rate for that vehicle in 2024 or any later year.
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