A taxpayer who operates as a single-member limited liability company (LLC) and is treated as a disregarded entity for federal income tax purposes, reporting business activities on Schedule C, is considering the acquisition of a truck before December 31. The plan is to place the vehicle into service on that same date. The intended usage is 60% for business and 40% for personal purposes. The central question is whether the taxpayer may claim the Section 179 deduction on Form 4562 for the full 60% business-use portion.

Under the Internal Revenue Code, Section 179 allows an election to expense the cost of qualifying property, including certain vehicles, in the year the property is placed in service. However, the deduction is generally limited to the portion of the property's cost that is attributable to business use. For a passenger automobile or a truck subject to the business-use percentage, the deduction cannot exceed the amount calculated by multiplying the cost by the business-use percentage.

In this scenario, the truck is used 60% for business and 40% for personal use. Therefore, the taxpayer may claim a Section 179 deduction only for the business-use portion, which is 60% of the truck's cost, subject to other applicable limits (e.g., the Section 280F dollar caps for vehicles, if the truck is not a heavy vehicle). The deduction is reported on Form 4562, and the business-use percentage must be substantiated.

It is important to note that placing the truck into service on December 31 is permissible, as long as the vehicle is actually available for business use on that date. The taxpayer must be able to demonstrate that the truck was acquired and ready for its intended function before year-end.

Given that the client is a disregarded entity, the business activity is reported on the owner's individual income tax return (Form 1040, Schedule C). The Section 179 deduction flows through to the owner's personal return, subject to the overall business income limitation.

In summary, the taxpayer can take the Section 179 deduction for the 60% business-use portion, but not for the personal-use portion. The deduction should be calculated based on the business percentage, and all relevant tax forms and substantiation requirements must be followed.