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Vehicles that qualify for so-called SUV tax deduction for business

oldgreenbayoldgreenbay Posts: 1
edited March 20 in Porsche
How do I generate a list of vehicles that would qualify under the IRS tax deduction rule for vehicles 6000 Lbs and more? The vehicle can be used for business but what range of vehicles would be eligible? Thanks
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Comments

  • andre1969andre1969 Posts: 21,846
    is that 6000 lb GVWR or is it curb weight? If it's curb weight, precious few vehicles would be able to qualify, but if it's GVWR then essentially, anything based on a full-sized pickup platform, even a half-ton pickup, would qualify.

    Some midsized pickups and SUVs, like the Dakota, Durango, Trailblazer, Pathfinder, ect might qualify as well.

    I doubt that there are any cars these days with a GVWR that high. It was pretty common in the 70's, before downsizing, as most full-sized cars had a GVWR of 6000 lb or more. My buddy's '04 Crown Vic has a GVWR or 5500 lb, and that's probably about the max these days for cars.

    I also doubt if there are many minivans or crossovers that would have a GVWR that high. However, the Pacifica has a 6600 lb GVWR, so there may be a few others.
  • highenderhighender Posts: 1,362
    the Porsche Cayenne and its cousin the VW Touareg....

    both these crossover vehicles qualify for the 6000 lbs GVWR.

    It is nice to use this exemption.... :-)
  • rockyleerockylee Posts: 14,011
    That's crazy, but cool. How much savings ?

    Rocky
  • andre1969andre1969 Posts: 21,846
    Rocky, I don't think the heavier GVWR vehicle actually saves you more overall, but what it does allow you do to is depreciate the full cost of it in the first year or two, instead of having to amortize it over a longer period.

    Actually, I guess this would make it more enticing to buy a vehicle more often, since you could depreciate it more quickly. For instance, if you could buy a brand-new $50K vehicle and write off the $50K in the first year, it seems to me that would give some incentive to just go buy another $50K vehicle to write off the following year. I'd imagine that trade-in price is factored somewhere, though.
  • highenderhighender Posts: 1,362
    Yes...laws are crazy sometimes...

    You can write off $100,000 a few years ago...but that has decreased to $50,000 or less this year.

    If you can deduct more...than you pay less taxes...and may have more money available for investment purposes...with the additional benefit of creating jobs.

    That is why congress passed the 'jobs creation act' back then......to help stimulate the economy.
  • fintailfintail Posts: 33,496
    "..and may have more money available for investment purposes...with the additional benefit of creating jobs. "

    If only those theories worked so well in reality.
  • rockyleerockylee Posts: 14,011
    Well many still believe in the "Trickel Down Theory" which some say will help the rich create jobs since they have more money to spend on investments. What I see is more rich driving nicer cars with those savings. I wished I could join em' ;)

    Rocky
  • highenderhighender Posts: 1,362
    it was great to get a $35,000 tax refund... enough said....

    and believe me, we invested it here in the good ole USA....

    :shades:
  • rockyleerockylee Posts: 14,011
    Ok great. I wished more of the rich folks like you did so. ;) Many rich folks that do have the power to create jobs growths are moving there company's to China, India, etc. That tax savings thus doesn't benefit america.

    Rocky
  • gagricegagrice San DiegoPosts: 28,845
    That tax savings thus doesn't benefit america.

    The tax saving derived from buying a vehicle in the US for your business is a benefit to all Americans. First off most heavy vehicles in the category we are talking about are built in the good ole USA. Once bought here they are used here by either the business owner or the employee of that business.

    I think you are confusing the wealthy that do nothing to help America, with the thousands of small business men that are creating jobs here. There are some well known names that pay very little taxes on enormous wealth. They keep their money in off shore accounts and only spend it in the USA to push their political agenda.
  • fintailfintail Posts: 33,496
    I'd like to see a study of the cost of such writeoffs vs the benefit.

    "Once bought here they are used here by either the business owner or the employee of that business. "

    For personal pleasure as well.

    I am sure that "political agenda" is all left wing, too. Talk about an agenda.
  • highenderhighender Posts: 1,362
    I bought a suburban....and all the money benefits the auto maker...down to dealer....down to the paper boy who delivers their newspaper. There are subsequent benefits also...like parts that are provided by GM...DELPHI, and trickle down benefits to the retired pensions of long retired workers.

    If we all bought more American, than our auto industry would not be in such a precarious situation. Of course, there is a flip side to that argument...and that is the auto makers must also earn our business.

    Tax cuts benefit their target market mostly....and those are mostly trucks made in USA....since there is a 6000 lbs GVWR requirement.

    But that will only go so far....

    We should try to buy American, when it comes to furniture and all other things, IMHO.

    You want to see trickle down theory ? SImple ! In 1982, when I sneaked across to visit Mainland China....all people were poor, on bicycles. Only cars you see are government owned....all of them. People lived in shacks and even the best party member did not own anything that in our culture is basic.....like stereos, different clothes, collectors items, nice furniture, etc....

    fast forward to 2005. In 20 short years, I cannot find much things made in Japan or Taiwan anymore...

    But anything from toothpicks to pens to underwear and clothes to stereos and furniture, they are all made in China. Go on the streets of China, and the traffic jams are worse than the SF Bay ARea,,,,,,and the ladies are all wearing the most fashionable shoes ( the one with the pointy toes , leather and square but pointy). Cell phones everywhere.

    As the number one consumer nation in the world, OUr money sure did a great job of finanacing thier economy.....

    /We trickled right into their economy....

    Not that there is anything wrong with that. :D
  • fintailfintail Posts: 33,496
    But a lot of these sales would have happened anyway. It's a small subsidy. I'm really curious as to the costs vs benefits of such legislation. IMO letting already wealthy people writeoff silly vehicles in a time of massive debt and deficit is painfully shortsighted.

    When you can't sink lower, there will always be an improvement. Chinese cases always show this. That dies not prove trickle down theory.

    "and the ladies are all wearing the most fashionable shoes"

    But are they real, or $10 fakes? I once received a fake pair of Bally shoes as a gift...they look OK, but the materials, not quite. China is a poor example for so many economic issues, not to mention the continued human rights atrocities. That alone is a good reason to buy American, you're at least supporting a mainly benevolent system.
  • gagricegagrice San DiegoPosts: 28,845
    letting already wealthy people writeoff silly vehicles in a time of massive debt and deficit is painfully shortsighted.

    It was a one year loophole that got closed in 2004. Name one year in the last 50 years that our National debt was paid down.

    The tax provision's original intent back in the 1970s was to enable small farmers and self-employed workers to buy a truck or van without having to fork over the luxury car tax that was then in effect and has since expired. At the time, it made perfect sense to qualify the vehicles by weight because no luxury cars exceeded the 6,000-pound gross vehicle weight threshold.

    Under the Jobs and Growth Act of 2003, Congress raised the deduction ceiling for these heavy-class vehicles from $25,000 to $100,000, bumped the "bonus deduction" from 30 percent to 50 percent, and left in place the accelerated five-year depreciation schedule. This, in effect, made virtually all three-ton, business-use SUVs fully deductible in the first year. More than 50 vehicles qualified for the tax break.

    Sure enough, tax-savvy self-employed professionals such as doctors, dentists and yes, accountants, connected the weight of today's luxury SUVs with the obscure tax loophole and started sporting heavy iron in order to deduct the entire purchase price in the first year. Which might explain why traffic lanes have seemed a little narrower lately.

    Congress reversed itself last fall with passage of the American Jobs Creation Act of 2004 and cinched back the SUV loophole from $100,000 to $25,000 while retaining both the 50-percent bonus deduction and the five-year depreciation schedule. The deduction is claimed as a Section 179 expense, meaning you must be in business, filing a Schedule C or corporate tax return, to claim it.
  • oregonboyoregonboy Posts: 1,653
    During the Clinton admin, the national debt as a percentage of GDP declined. See: http://zfacts.com/p/318.html

    The debt to income ratio IS the reasonable way to view the size of the debt. A $1000 debt is overwhelming to someone who makes $500 per year but of little concern to someone who makes $500,000.
  • fintailfintail Posts: 33,496
    That doesn't mean the loophole is justifiable, and I never even remotely hinted that the debt was ever under control. But it's as out of control now more than ever, and this type of junk policy doesn't help.
  • gagricegagrice San DiegoPosts: 28,845
    During the Clinton admin, the national debt as a percentage of GDP declined

    I'm not much on squeagly lines on a chart. In actual dollars the last time we paid down our national debt was 1960 during the Eisenhower administration. In spite of fancy accounting during the Clinton years we still went further into debt. Our debt should have gone down in the non war years and it did not. Realistically as you pointed out our current deficit as a percentage of our GDP is negligible in comparison to other war years.

    recent debt

    debt 1900-2003

    yearly deficit xls
  • gagricegagrice San DiegoPosts: 28,845
    That doesn't mean the loophole is justifiable,

    Quite frankly I am more concerned about negative loopholes like the AMT rip-off. I paid an additional $9640 AMT this year and that is not on a big income. It is about what is needed to live middle class in So. California.

    About 15 million more taxpayers with incomes ranging from $75,000 to $500,000 are expected to get hit with the alternative minimum tax, created nearly 40 years ago to ensure that the richest pay their fair share of income tax.

    Amherst CPA Gary Krull has seen his clients pay from $20 more to $20,500 more because of the AMT. He predicts that about 7 percent of them will be affected by the tax on their 2005 returns, a 1 percent increase. David Barrett, tax partner at Freed Maxick & Battaglia CPAs PC, estimated that about half of his clients will pay the AMT this year.

    "They're being dishonest," he said. "Either they didn't understand it or they knew it was going to raise funds and they were not going tell anyone. It has gone far beyond what it was intended to do."

    At high risk of paying the tax are New Yorkers and others living in high-tax states who usually counted on lowering their federal bill by deducting local and state taxes. The AMT also doesn't allow other reliable tax breaks, such as mortgage and investment interest and personal exemptions for children.


    http://msnbc.msn.com/id/12033487/
  • andre1969andre1969 Posts: 21,846
    The tax provision's original intent back in the 1970s was to enable small farmers and self-employed workers to buy a truck or van without having to fork over the luxury car tax that was then in effect and has since expired. At the time, it made perfect sense to qualify the vehicles by weight because no luxury cars exceeded the 6,000-pound gross vehicle weight threshold.

    Was there a luxury car tax back in the 70's? I didn't think that came about until the late 80's? As for GVWR, just about every single full-sized car built in the 70's, at least until they started downsizing, had a GVWR of over 6,000 lb. I'd imagine that even some midsized wagons were pushing close to 6,000. The GVWR of my '76 LeMans, a coupe with a 350, is something like 5625 lb, and I've even seen compact Darts with a GVWR sticker stating 4800 lb. So if these smallish (for the time) cars GVWR that high, it's a safe bet there was a whole crop of them that broke the 6,000 lb barrier.

    Wasn't there some kind of provision written that in addition to the GVWR threshold, the vehicle also had to be classified as a truck?
  • highenderhighender Posts: 1,362
    YOu could have been president, or anyone of us...or even Daffy duck, during the early to late 1990s , and the national debt would have been fine....

    That was a period of economical surge caused by the internet high tech and real estate boom. Cash was rolling in....and not because clinton was there....

    jsut want to clear that up....it was not due to clinton .
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