One of the most significant advantages of buying used vehicles at Nimey’s New Generation Cars is the cost savings. And if you’re a business owner shopping the Nimey’s used cars inventory, you may wonder about Section 168, a part of the Internal Revenue Code that allows for bonus depreciation, unlocking further tax savings. Here is an overview of Section 168 and how it applies to used vehicles.

What is Section 168?

Section 168(k) is a section of the tax code allowing businesses to deduct a large percentage of the cost of qualifying property in the first year it’s placed in service. This amount is sometimes known as bonus depreciation, and it can lower your tax burden and improve cash flow. In some cases, it can even be used to enhance your business’s Section 179 deduction.

Requirements for Used Vehicles

Section 168 does apply to used vehicles if the following criteria are met:

• Not previously used by the taxpayer: You cannot have used the vehicle for any purpose before placing it in service for your business.
• Not acquired from a related party: As defined by the IRS, a “related party” is a family member or a related business. The used vehicle must not have been acquired from a related party.
• Meets other depreciation requirements: The vehicle must be used for business purposes and have a useful life that can be determined.
• Acquired after September 27, 2017: The Section 168 rules changed on this date, so the used vehicle must have been acquired after that.

Browse Nimey’s Used Cars in Utica, NY

While we strive for accuracy, we would caution that we’re car people; since nobody wants to get on the IRS’s bad side, always discuss tax issues with your accountant or tax professional. However, if you’re looking for versatile and affordable commercial vehicles or the service that keeps them running, there’s nowhere better than Nimey’s New Generation Cars. Visit us today to browse our extensive used car inventory.