THIS WEEK'S STORY
Why giving away your old fleet might cost you more than selling it
That truck sitting in your yard? The IRS already wrote it off. You should too.
Here’s a mistake that costs construction owners every year: assuming a donated truck is a tax win.
You’ve got a fleet of work trucks. They’ve hauled equipment, logged miles, taken a beating. You’ve depreciated every dollar out of them. Now they need to go, and someone tells you — “donate them to charity, skip the recapture, get a nice deduction.”
Sounds clean. It’s not.
When a truck is fully depreciated, its book value is zero. That’s the number the IRS cares about. You don’t have depreciation recapture because there’s no gain. But there’s also no charitable deduction, because the deduction is based on the lower of fair market value or your adjusted basis — and your adjusted basis is zero.
The charity can sell it, use it, park it on their lawn. Doesn’t matter. You walk away with a good feeling and a $0 deduction.
Now here’s what you should be thinking about instead. If those trucks still have basis left, donating appreciated equipment can generate a real deduction. That changes the math. A truck you bought two years ago and only partially depreciated is a different conversation.
The bigger play for most construction businesses? Plan the replacement cycle around the depreciation schedule. Know when your fleet hits zero basis. Time purchases so you’re maximizing Section 179 or bonus depreciation in high-income years. Use the years when income spikes — a big job closes, a project delivers — to absorb the most deductions.
Your trucks are working assets. Your tax strategy around them should work just as hard.
