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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: 22,026
    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 Wyoming, MichiganPosts: 13,989
    That's crazy, but cool. How much savings ?

    Rocky
  • andre1969andre1969 Posts: 22,026
    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: 33,859
    "..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 Wyoming, MichiganPosts: 13,989
    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 Wyoming, MichiganPosts: 13,989
    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: 29,035
    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: 33,859
    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: 33,859
    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: 29,035
    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: 33,859
    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: 29,035
    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: 29,035
    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: 22,026
    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 .
  • fintailfintail Posts: 33,859
    Not was it due to residual trickle down effects as some have claimed...
  • highenderhighender Posts: 1,362
    sorry, I was posting near midnight, and the post got lost....so I will repost again.

    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.

    True...in the midwest and farmlands people would buy a truck anyways. IT is a small subsidy...but it would help America's auto makers sell their products...hey..that is great ! Just look at how Japan and China protect their own products, by slapping import duties of up to 100%. I was just in a Rolls Royce dealership in Guangzhou in Jan....You know how much do they want for a Rolls Phantom ? about 1 million US>> double the price, and I asked why, and they said import duty .

    Let the US slap import duties on Toyotas, textiles, Hondas, etc....( but wait, they are one step ahead,,,they built factories here...and still take the profits home...oh well) . Let us level the playing field...

    IMO letting already wealthy people writeoff silly vehicles in a time of massive debt and deficit is painfully shortsighted.

    I think you are not seeing the big picture. The law allowed many people to accelerate their depreciation...basically writing off the entire car. Now that the money went to the auto maker....which can them pay their workers....and their workers can go on buying also. As to the people who used the writeoff, not only do they get a new piece of machinery that can generate profit, but they still have more money left over....to either hire more workers in the US, or buy an expensive luxury item...either way...the money is circulated back into the economy.



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

    China could have gone the way of North Korea..which has famine nearly every year. China has 1.2 bil people...lots of mouths to feed. They used to import food. Now they make enough of their own. Our US consumerism is trickling down to their every corner. Believe me, I was there last April, and then again 2 months ago.

    Before China opened up, my workers said life was easy.....they used to just show up for work, talk, and play some ping pong, and then go home....no incentive to work. Now with market based economy...everyone wants to work...and get some of the money that Americans gave Walmart(example) to give to the Chinese economy. NOw even in some relatively unknown cities, people are driving cars., and using cell phones, and computers. THis was unheard of 15 years ago.


    "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.

    Whether fakes (there are $5 fakes.) or real ones...they are forging ahead with the trickle down money that was nonexistant a mere 15 years ago. I almost bought a $7 pair of real nikes...since they are made there.

    China is a poor example for so many economic issues,

    I disagree. Having traveled to many places...I think we have to have more basic factories to provide jobs and products for our own use. Sending all our money over to another country...is ultimately not good for our own economy.....in general. But it has been good for china and Audi. BTW, which vehicle is the official government vehicle of China ? ( I will give you 3 guesses, but you will only need one )

    not to mention the continued human rights atrocities.

    I agree here. I almost went up to a security police at Tian An Men Square, to ask them why they are letting the atrocities go on. But my friend and wife told me to wait til they run clear, as they did not want to be held incommunicado for 10 years on no charges. The security guy that I talked to (not about the massacre) , answered my questions, and when I walked away...he detained a person for no reason, and searched the persons bags... something that is unconstitutional here. I have a picture of it that I sneaked in. :mad:

    That alone is a good reason to buy American, you're at least supporting a mainly benevolent system

    I think we should try to make better products at a good value, so that our people will want to buy American....and try to buy American...... :D
  • gagricegagrice San DiegoPosts: 29,035
    Further clarification:

    Internal Revenue Service Code Section l79 lets a business write off the purchase price of equipment the first year (up to a
    total of $105,000). This code section eliminates the delay of depreciating assets over a number of years. Passenger cars aren't eligible for the equipment tax deduction. But trucks and SUVs are. However, there was a $25,000 ceiling for trucks or SUVs, limiting how much could be written off the first year.

    A loophole in the $350-billion stimulus plan passed in 2003 removed the $25,000 ceiling for SUVs. The large SUVS (over 6,000 pounds GVWR) were considered trucks, not passenger vehicles. The amount expensed the first year grew from a maximum of $25,000 to the full $105,000 in 2005. Suddenly, being able to write the full purchase price off immediately made the larger SUV a more attractive purchase. They gained an edge over regular automobiles and smaller SUVs subject to customary depreciation or the $25,000 ceiling.


    SUV tax break
  • fintailfintail Posts: 33,859
    There's something about being an emigrated Chinese and being a trickle-downer. I guess the harsh failure of Chinese wannabe communism/socialism can do that. All of this seems so familiar.

    "I think you are not seeing the big picture. "

    I think I am. It's simply the public subsidizing a private luxury. I love it when I see a commercially plated luxo-SUV parked at the local trendy mall on a Sunday. I guess taking the Mrs. to get her weekly $1000 handbag is business use!

    I'm sorry, but I just don't see China as proof of this economic theory working in our mature economy. With all due respect, it is apples to oranges for me. And the economic progress there (could there really be regress compared to the China of 30 years ago?) certainly has not improved freedom. Kind of like how, slowly but surely, freedom isn't improving here either.

    Again, I want to see an analysis of the costs of such reverse-socialism vs the benefits. Can numbers prove it to be fiscally responsible?
  • highenderhighender Posts: 1,362
    I am not sure what you are trying to get at. :confuse:

    My point is really simple. If you buy a product from country A, then the money or profits go to that country A. Not the country B that you live in, though it may have some inport export benefits, and some dockworkers will have jobs.

    China had no market and no factories. Then we dismantled our factories here in America, and built them there. Now there are tons of factories....even on the side of freeways..which is all new. The new airports are top notch. Now if we kept the factories here...and also bought American, then the money would have circulated here...pure and simple. We have to try to make our own good more attractive.

    Jobs Stimulation Package took this into account, and thus many US auto makers...plus some foreign ones, benefited.

    But the effect cannot last, due to recent trends to buy foreign autos and the huge health care burden each car made here has. Toyota has only a $300 health care burden per car sold. GM has a $1400 health care burden per vehicle sold..... :cry:

    A SUV can be used anywhere...even at a mall. I think monies should be allowed to circulate in the private sector more...instead of the government sector...which often just burns it up in hiring more inefficient people to push papers. San Francisco was a victim of this when Willlie Brown was mayor.

    There are all sorts of tax breaks....and if they help the industry....I say go for it. That is what the European Union, Asian nations, and many other countries do to us. Look at Airbus, and how Boeing has to compete with this Euro-country owned corp.

    The tax breaks are there for a reason. IT is not simply money going into pockets of the rich. That is the simplistic view IMHO....""what does not benefit me...is wasteful view. The rich do not bury the money....they have the notorious habit of spending money on many things....actually injecting it back into the economy.
  • fintailfintail Posts: 33,859
    I didn't think it would be clear. I won't go into it, I'm not looking for a fight. All of this just seems very familiar.

    I'd just like to see a cost-benefit analysis of this subsidy. It's really a bizarro-world form of socialism when you look at it.

    And I can't have blind faith.
  • gagricegagrice San DiegoPosts: 29,035
    I'd just like to see a cost-benefit analysis of this subsidy.

    It was quite simple. Buy more big ticket vehicles mostly US made. Benefits US manufacturers and small businesses. I believe the analysis can be construed positive or negative. It depends on which side of the political fence you are on. To those that hate big vehicles and believe they are the end of our existence will say the benefit to business is not justified.

    The bottom line is it worked and stimulated sales of large PU trucks and SUVs. It really is perspective. I believe in a capitalistic approach to business. Without tax breaks & incentives small business does not thrive. The government needs to keep hands off except in the case of monopolies.
  • fintailfintail Posts: 33,859
    I wanted some numbers. Theories are awesome, but they are theories.

    The government needs to keep its hands off, but businesses need tax breaks and incentives? Hmmm, that's interesting. And it's just not small businesses that make out. Reverse socialism.
  • highenderhighender Posts: 1,362
    fintail:

    I am not looking for a fight either...( you got your pistol ready? we will do it the old fashion way !) J/K

    I have done some research , (specially on animals with tail fins) ...and one thing stands out...numbers , though important, are hardly ones which can decide this. There is a saying, find a stat to prove one thing, and someone can find a stat to disprove it.

    First eggs are good for you...then they are bad...now they are good....all backed up by stats...

    Sometimes...numbers are just there. Economics is theory and numbers...and they still cannot predict anything with any degree of certainty.
  • fintailfintail Posts: 33,859
    Yeah, I know...there are three types of lies as well. Simple numbers only go so far.

    I just haven't seen this idea to be shown to be fiscally responsible. If it really is there to act as a subsidy for automakers, then so be it, but the powers that be shouldn't disguise it as some kind of great beneficiary for anyone else.
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