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by Cynthia Koerner, Executive Vice President and CFO, MFTA You may be able to expense up to $108,000 for Mitsubishi Fuso medium duty commercial trucks purchased and put in service in 2006.
Logan Township, NJ — U.S. tax provisions in effect for tax year 2006 may allow you to deduct the full value of a new commercial truck or trucks placed in service during the tax year.
The U.S. Internal Revenue Code, Section 179 (IRC 179) allows you to immediately expense certain capital equipment instead of depreciating it over time. The asset must be placed in service in the tax year in which it is deducted. According to IRS publication 946, How to Depreciate Property, the maximum capital purchase you can elect to deduct as an expense for 2006 has been set at $108,000 for qualifying property ($143,000 for qualified enterprise zone property, qualified renewal property and qualified New York Liberty Zone property).
The deduction is applicable to a wide range of capital property, including commercial trucks with a gross vehicle weight rating of more than 6,000 lb. There are limitations based upon the amount of qualifying property placed in service during the year (the phase-out begins at $430,000 in 2006) and taxable income derived from the active conduct or trades or business.
MFTA is not providing tax advice. Please consult your tax advisor for details on how this can apply to your situation.
About Mitsubishi Fuso
Headquartered in Logan Township, NJ, Mitsubishi Fuso Truck of America, Inc., is a subsidiary of Mitsubishi Fuso Truck & Bus Corporation, Tokyo, part of DaimlerChrysler’s Commercial Vehicle Division (CVD). MFTA markets a complete line of diesel-powered, medium-duty cabover trucks through more than 170 dealer locations throughout the United States and Canada. Currently, there are more than 80,000 Mitsubishi Fuso standard, 4 wheel drive and crew cab trucks in use in the U.S. and Canada, fulfilling the transportation needs of a wide variety of businesses and industries, including beverage, refrigerated and dry cargo delivery fleets, vehicle recovery, towing, pest control, plumbing, light construction and landscaping.
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