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Old 12-26-2007, 06:34 PM
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I am curious to know about the SUV tax

I am curious to know about the SUV tax. I have an S Corp and wanted to buy a Volks Toureag. I know the gross weight is over 6K lbs, but I was curious to know if I can purchase a used one and still get the same tax benefits. The ones I am looking at are right at 25K. Please let me know asap. Oh, and do I only have a few days left to make this purchase to offset my 2007 income??



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Old 12-27-2007, 10:18 AM
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What are SUV Depreciation or write-off rules?

Basic Rules for Heavy SUV
A vehicle would qualify for write-offs if it falls under the Heavy SUV classification where the purchase of a NEW vehicle weighs more than 6k lbs. If it meets this requirement, then it would be exempt from the luxury auto dollar caps because they fall outside of the definition of a passenger auto in Code Sec. 280F(d)(5).

The Section 179 Depreciation write-offs limits

The American Jobs Creation Act of 2004 (the Jobs Act), P.L. 108-357 , imposed a limit on the expensing of heavy SUVs. As expressed under Code Sec. 179(b)(6) , not more than $25,000 of the cost of a heavy SUV placed in service after Oct. 22, 2004 and used 100% for business may be expensed under Code Sec. 179 . Further, because heavy SUVs are exempt from the luxury auto dollar caps, the balance of the heavy SUV's cost may be depreciated under the regular rules that apply to 5-year MACRS property (e.g., a 20% first-year depreciation allowance if the half-year convention applies for the placed in service year).

Your specific situation involves a purchase of a USED SUV vehicle, therefore, you may not be able to elect the section 179 deduction of $25,000 but you would be able to depreciate this vehicle under the rule for 5-year MACRS property, as discussed above.

The IRS rules on Section 179 Depreciation specifically states the asset placed in service must be a New Asset. For additional discussion on Section 179 rules in general please refer to the following article below.

What are IRS "Section 179 Depreciation limits for 2007"?

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Old 01-06-2008, 04:54 PM
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Does it really have to be a NEW vehicle to qualify? I thought I'd read somewhere that as long as it was over 6000 lbs it didn't matter.



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