USA Way to take 2021ty accel depr on vehicle arriving 2022?

[Andrea - AZFleetSales]

Hi everyone! More than a few of my small biz accounts have asked a question. Although I never give tax advice, I like to state what I believe is the answer and tell them to ask their accountant/cpa. Because vehicle inventory is so low right now and production quite slow, clients have asked if they order a truck that qualifies for accelerated 1st year depreciation, if they can still write it off this year if it doesn't arrive before Dec 31. Most will finance with a certain amount down. Most wouldn't even mind having the biz place a full deposit of all costs, and then get a refund when the vehicle and financing comes through. Is there a way to take the full depreciation either through the normal course of buyers order now with a few thousand dollar deposit, or some creative way that meets the legal guidelines for the 2021ty if vehicle actually arrives in 2022? I'm selling orders below invoice, so I have quite a few of these that I'm dealing with that were expected to arrive before year end, but may not. Thanks for any suggestions you can give! I'm glad to be here.

 

[Praz Finpoint]

From an Accounting perspective, recording a Vehicle in 2021 that will only be delivered in 2022 is not allowed, since there is no Vehicle delivered by the vendor. The downpayments made are recorded as Prepayments in the Balance Sheet, and not Property, Plant and Equipment. If it doesn't meet the Accounting Rules which forms the base for the Tax Returns, I don't believe the suggestion above is feasible.

 

[Andrea - AZFleetSales]

Not what my clients are hoping to hear as they began ordering these vehicles as early as May. But no one anticipated how bad/long the chip shortage, metals shortage and transportation shortages would last. Sad, because they counted on the write off when ordered. Thank you for the confirmation.