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Old 09-27-2012, 04:22 PM
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How are sport utility vehicles (SUVs) that are used in a trade or business depreciated in 2012?

Per the IRS Code Section 179, the maximum depreciation allowable for sport utility vehicles (SUVs) that is being used in a trade or business, (provided they have gross vehicle weight ratings (GVWR) in excess of 6,000 pounds) is limited to $25,000 for the tax year 2012. Any remaining basis is depreciated using a MACRS five-year life.

Per the IRS, a SUV is any four-wheeled vehicle that is;

1. Primarily designed or that can be used to carry passengers over public roads, streets, etc.

2. Is not subject to IRC Sec. 280F luxury auto depreciation limits (for autos rated at 6,000 pounds or less).

3. Has a GVWR of not more than 14,000 pounds.

4. Is designed not to have more than nine persons behind the driver’s seat.

5. Does not have a cargo area of at least six feet interior length that is not accessible from the passenger compartment (cargo area may be open or enclosed with a cover).

It is worth noting that the IRS Code Sec. 179 is not permitted if business use is 50% or less [IRC Sec. 179(d)(1)].

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