What are the IRS rules regarding switching to the standard mileage method in 2024 for a pickup truck that had Section 179 expense claimed in 2017 by a single member LLC?
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To determine whether you can switch to the standard mileage rate in 2024 for a pickup truck that had a Section 179 expense deduction claimed in 2017 by a single-member LLC, you must consider the IRS rules for the standard mileage rate, Section 179, and the treatment of vehicles for depreciation purposes.
1. Eligibility to Use the Standard Mileage Rate
The IRS allows taxpayers to use the standard mileage rate for a vehicle only if they use it in the first year the vehicle is placed in service. If you use the actual expense method (including Section 179 or bonus depreciation) in the first year, you cannot switch to the standard mileage rate for that vehicle in later years. This rule applies to both owned and leased vehicles:
- "If you want to use the standard mileage rate for a vehicle you own, you must do so in the first year you place your vehicle in service. In later years, you can deduct actual expenses instead, but you must use straight line depreciation."
- "You cannot use the standard mileage rate if you claimed a depreciation deduction using any method other than straight line, for example, ACRS or MACRS; claimed a section 179 deduction on the car; or claimed the special depreciation allowance on the car."
2. Effect of Section 179 Deduction
If you claimed a Section 179 deduction for the pickup truck in 2017, you used the actual expense method in the first year. The IRS specifically prohibits switching to the standard mileage rate in a later year if you claimed Section 179 in the first year:
- "You cannot use the standard mileage rate if you... claimed a section 179 deduction on the car."
- "If you want to use the standard mileage rate for a vehicle you own, you must do so in the first year you place your vehicle in service. In later years, you can deduct actual expenses instead, but you must use straight line depreciation."
3. Application to Single-Member LLCs
A single-member LLC is disregarded for federal tax purposes unless it elects to be treated as a corporation. Thus, the rules above apply to the LLC as they would to a sole proprietor.
4. Summary Table from IRS Publications
- First year placed in service (2017): Used actual expense method and claimed Section 179.
- Subsequent years (including 2024): Cannot switch to the standard mileage rate for this vehicle.
5. Conclusion
You cannot switch to the standard mileage rate in 2024 for a pickup truck that had Section 179 expense claimed in 2017. Once Section 179 (or any depreciation method other than straight line, or bonus depreciation) is claimed in the first year, the standard mileage rate is permanently unavailable for that vehicle in all subsequent years.
If you have further questions about depreciation or vehicle deductions, please provide more details.
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