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Eight 2011 Last Minute Business Tax Tips for Vehicles. Shop For Your New Business Vehicle at Tunkhannock Auto Mart, 509 Hunter Highway Tunkhannock PA 18657.

Please note: We are not Tax Advisors, Accountants or
Financial Advisers but here are some tips from a credible tax resources that
may help you. Note: tax laws do change constantly, please consult with a Tax
professional, Your Tax Advisor or Business Accountant to see which tip best
suits your financial needs.

Buy Your New Business Car At Tunkhannock Auto Mart

Tunkhannock Auto Mart Has Last Minute Deals!

You or your corporation can claim up to $8,000 in bonus
depreciation on a new (not used) car purchase and placed in service before
midnight on December 31,2011. You add the $8,000 to the $3,060 luxury limit for
a 2011 limit of $11,060. To get to this limit, you can use a combination of
Section 179 expensing and depreciation. You reduce the $11,060 limit by
personal use.

Example: If business use is 80
percent, then your limit is $8,848 (80 percent of $11,060). The dealer’s
demonstrator vehicle qualifies as a “new” car eligible for bonus depreciation.

2. Buy a New SUV or Crossover Vehicle with a
GVWR of 6,001 Pounds of More

Tunkhanncok Auto Mart Dodge Journey

Tunkhannock Auto Mart Dodge Caliber

Tunkhannock Auto Mart Dodge Durango

You can qualify for these three tax breaks if you purchase and
place in service before midnight on December 31, 2011, a new sport utility
vehicle (SUV) or crossover vehicle with a gross vehicle weight rating of more
than 6,000 pounds: Come to Tunkhannock Auto Mart and test ride our full line of
SUV’s or Crossover vehicles. (Crossovers: Dodge Caliber, Dodge Journey, Dodge
Nitro etc.) (SUV: Jeep, Dodge Durango etc.)

Expensing of up to $25,000

1. Fifty percent bonus depreciation on amounts not
   expensed
2. MACRS depreciation on the balance remaining
   after application of breaks 1 and 2, above.

Example: Before midnight
December 31,2011, you buy and place in service a $50,000 qualifying SUV for
which you can claim 90 percent business use. Your business cost is $45,000 (90
percent times $50,000).

Total write-off would be $35,000:

$25,000 in Section 179 expensing

$10,000 in bonus depreciation (50 percent times
$20,000 remaining basis)
$500 (assuming 5 percent mid-quarter MACRS
applies, which is likely), compute as follows: $10,000 remaining basis times 5
percent).

If you want, you may expense less than $35,000. That figure is the
maximum deduction on this vehicle.

3. Convert Your Personal Vehicle to Business Use

If you have a vehicle you purchased New consider converting it to
business use by December 31,2011, to qualify for 50 percent bonus depreciation
which is:

• unlimited on the SUV’s and crossover vehicles
  with a GVWR or more than 6,000 pounds;
• limited to $11,060 on cars with curb weights of
  6,000 pounds or less; and
• limited to $11,060 on SUV’s, crossover vehicles,
  and pickup trucks that do not have a GVWR greater than 6,000 pounds.

Example: Emerson Chrysler purchased a new car in 2010 while he worked as an employee. He used the car for commuting to and from his job. He never used the car for business until he became self-employed in August 2011. Because Mr. Chrysler purchased the car new, he may use bonus depreciation in calculating his self-employed car deductions for 2011. Thus, Mr. Chrysler’s 2011 luxury limit is $11,060 on his 2010 purchased car.

4. Buy a Used SUV of Crossover Vehicle with a
GVWR of 6,001 Pounds or More

Section 179 expensing applies to both new and used qualifying
assets. So if you or your corporation can purchase and put in service before
midnight on December 31,2011 you can qualify for expensing of up to $25,000.
Bonus depreciation does not apply here (only on NEW vehicles).

If you used the SUV or Crossover vehicle constitutes more than 40
percent of your personal property assets placed in service during the year, you
must use the mid-quarter MACRS depreciation method, which grants 5 percent
depreciation for the year.

Example: Before December 31,2011
you buy a used, $30,000 crossover vehicle that qualifies for Section 179
expensing. You can prove 94 percent business use. That gives you a $28,200
business basis in this qualifying crossover vehicle so your total deductions
come to $25,160: $25,000 in section 179 expensing. So stop by Tunkhannock Auto
Mart and any of our Sales Associates will assist you in choosing the right
vehicle that suits your financial needs.

$160 in MACRS depreciation (5 percent
mid-quarter MACRS times $3,200 basis that remains after you expensed $25,000
[$28,200 minus $25,000]).

5. Buy a Ram Pick Up Truck with a GVWR of 6,001
Pounds or More

If you or your corporation buy and put into service a qualifying
pickup truck (new or used) before midnight December 31, 2011, you may deduct up
to $500,000 of its cost. To Qualify, the Ram pickup must have:

• a GVWR of 6,000 pounds;and
• a cargo area (commonly called a “bed”) of at
  least six feet in interior length that is not easily accessible from the
  passenger compartment.

Example: You buy a $47,000
qualifying pickup truck  that you use
97.3 percent of the time for business. Using Section 179, you may expense up to
$45,731 (the 97.3 percent business part). If the pickup truck passes the
more-than-6,000-pound-GVWR test but fails the bed-length test, it is considered
an SUV eligible for expensing of up to $25,000. Stop by Tunkhannock Auto Mart.
We have a large selection of Ram trucks to choose from.

6. Buy a Qualifying Van

To qualify for expensing of up to $500,000, a van must:

• have a GVWR of more than 6,000 pounds,
• fully enclose the driver compartment and
  load-carrying device,
• not have setting behind the driver’s seat, and
• have no body section that protrudes more than 30
  inches ahead of the leading edge of the windshield.

If your van passes the GVWR test but fails one of the other
qualifying tests, the law deems it an SUV, eligible for expensing of up to
$25,000.

7. Sell Tax-Loss Vehicles to Third Parties

Your business vehicles give rise to gains and losses when sold to
third parties.

The original purchase price is your beginning
basis.

1. Depreciation reduces your basis.
2. Depreciation comes from within the depreciation
   tables or the IRS mileage rates.
3. When you sell or your corporation sells the
   business vehicle, you compare net business sales proceeds with net business
   basis to find gain or loss.

For tax planning purposes, you need to know if your vehicle would produce
a gain or loss on sale.

Example: Mr. Dodge has been in
business for 11 years, during which he:

converted his original personal car to business
use;

then traded in the converted car at Tunkhannock
Auto Mart on a new business car (car 2);

then traded in car 2 at Tunkhannock Auto Mart on
a replacement business car (car 3); and

then traded in car 3 at Tunkhannock Auto Mart
for another replacement business car (car 4), which he is driving today.

During the 11 years Mr. Dodge has been in business, he has owned
four cars which he purchased from Tunkhannock Auto Mart. Further, he deducted
each of his cars using IRS standard mileage rates. If Mr. Dodge sells his
mileage-rate business car today, he realizes a loss-on-sale deduction of
$27,000. The loss is the accumulation of 11 years of car activity during which
Mr. Dodge never cashed out, because he always traded cars before he learned
this rule. Trades are Section 1031 exchanges. Unlike sales where you cash out,
trades defer the tax results to the next asset. That’s how Mr. Dodge
unknowingly accumulated his big deduction.

To get an idea of how this one sale produces a cash cow, consider
this: when Mr.Dodge sells car number 4, he really is selling four cars-because
the 1031 exchange rules pushed the old basis of each vehicle into the
replacement vehicle’s basis.

Examine your car for this possible loss deduction. Have you been
trading business cars? Is your current car really four cars for tax purposes?
Do this examination soon! To take the loss, you have to sell your car to a
third-party before the year expires.

8. Sell Those Old Business Cars That Your
Children Are Driving

Is your teenager driving your old business car you purchased from
Tunkhannock Auto Mart? Does this car or other vehicles have a big tax loss
embedded in it? If so, take the vehicle and sell it to a third-party so that
you have a deductible loss.

Your loss deduction depends on your percentage of business use.
That’s one reason to sell this vehicle now, because the longer your let the
children use it, the smaller your business percentage becomes.

You might want a replacement vehicle before you
sell, and before doing anything, run the numbers. Any of our sales associates
at Tunkhannock Auto Mart would be glad to assist you with choosing the right
vehicle that best suits your financial needs.
For more information on purchasing a new business vehicle or used vehicle give Tunkhannock Auto Mart, 509 Hunter Highway, Tunkhannock, PA                                           a call at  (866) 880-2920 or stop by Tunkhannock Auto Mart and any of
our team members would be glad to assist you.

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