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Section 179 Deduction: Death, Retirement and Disability

9/23/2019

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What tax effect would death, retirement, or disability have on you or your business? Here’s an easy example to illustrate.
Let’s say that in 2017, you purchased for business use a pickup truck with a gross vehicle weight rating greater than 6,000 pounds. Asserting that you use the pickup 100 percent for business, you expensed the entire $55,000 cost.
What happens to that $55,000 expensed amount if you die, retire, or become disabled before the end of the vehicle’s five-year depreciation period?
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Death
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Consider these three factors:
  • Will your heirs pay estate taxes, your death? 
  • How will Section 179 apply?
  • What is the value of that pick up truck?
​Disability

This is not sweet. If you become disabled there are circumstances that will require you to pay taxes on prior year deprecation.
The method the IRS requires to recapture those funds makes matters even worse.
 You need a plan to protect you against  the IRS. 
​Retirement
 
With retirement, you have exactly the same problem as you would have if you were to become disabled. 
​Takeaways
 
You need to consider what happens should you become disabled, or retire, or die.
 
We are here to help. Please don’t hesitate to give me a call.
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    Important Disclosures


    Spencer Accounting Group, LLC does not provide investment, tax, legal, or retirement advice or recommendations in these blogs. The information presented here is not specific to any individual's personal circumstances.

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    To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.
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    These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable — we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

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    Author

    Keana Spencer is an Accountant, Entrepreneur, and Educator to her clients, with a strong passion.  Keana has over 10 years of experience and through her practice, she is a source of knowledge and strategies to her clients.

    Keana founded this website and decided and created this blog page to offer a space for those seeking knowledge to understand, however not to be confused with advice or planning strategies.

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