My question is ..........if we stretch it maybe we over 6000 pound vehicle owners can get a tax break. Is a superduty a SUV of sorts?
I will post copy from a site regarding this........... in my daily newspaper it states......"this tax loophole has been available since 1980, the federal tax break applies to vehicles that weigh more than 6000 lbs....when full. it was meant to help small buisness that used trucks and vans for farming, hauling and construction"............see below/ there will be post 1&2 and maybe 3 due to length.

 

Generous Tax Break for SUV Buyers

By Tom Reinhart
treinhart@blueandco.com

If you are a small business owner in the market for a business vehicle, looking for a substantial tax break, or both, a heavy sport utility vehicle (SUV) may be for you. The Internal Revenue Code Section 179 allows for an election to treat the cost of certain business assets as a current expense rather than a capital expenditure to be depreciated over time. The maximum allowable deduction for the Section 179 election is $20,000 for 2000, slated to increase to $24,000 for 2001. The problem is that passenger automobiles do not qualify for this deduction. In order to maximize your current deduction, the trick is to stay outside of the passenger automobile classification.

Passenger automobiles are any four-wheeled vehicles for use on public roads that have an unloaded gross vehicle weight of 6,000 pounds or less. A truck or van is included in this classification as well if it has a gross vehicle weight of 6,000 pounds or less. Depreciation for passenger automobiles is limited to amounts specified annually. The annual limit on depreciation for autos placed in service in 2000 is $3,060 the first year, $4,900 for the second, $2,950 for the third, and $1,775 for each succeeding year.

In order for your vehicle to not qualify as a passenger automobile, it must have a gross (loaded) vehicle weight rating above 6,000 pounds. This should not be confused with the vehicles "curb weight", which may be much lower than the loaded vehicle weight rating, and thus lead you to believe that the vehicle does not qualify. Several heavy SUVs and trucks meet this test, with the Ford Expedition and Excursion, Chevy and GMC Suburbans, GMC Yukon, Lincoln Navigator, and Toyota Land Cruisers being the most popular. We advise buyers to check with the dealer or the manufacturer specifications for written documentation that the gross (loaded) vehicle weight exceeds 6,000 pounds.

Also be advised that there are limitations which may reduce the amount of the Section 179 deduction available in a given year. These limitations generally come into play if you place more than $200,000 of qualifying Section 179 property into service for the year or if you have no active taxable income. With some proper planning, these limitations can be avoided. For an explanation of these and other limitations and their effect on your individual situation, consult your tax advisor.

Tom Reinhart is an accountant with Blue & Company, based in Seymour IN.

 

Published on Friday, December 20, 2002 by the Salt Lake Tribune
Loophole Gives SUV Buyers a Tax Break
by Jeffrey Ball and Karen Lundegaard

If you are a business owner, you are in for a sweet deal on a shiny gift this holiday: thousands of dollars off the price of a big sport-utility vehicle.

But don't thank Santa -- thank Uncle Sam.

As a result of a quirk of federal tax law, business owners are allowed to depreciate SUVs and pickups more quickly than cars. The discrepancy has been around for nearly two decades, but it is getting new attention amid the soaring popularity of SUVs and pickups as suburban people-movers. As the end of the year approaches, the tax break gets particularly popular, since business owners often are in the market for ways to cut their taxable income.

The deduction stems from the long-standing and somewhat bizarre classification of SUVs as "light trucks" rather than "cars." That means a tax break that was at least partly intended to help farmers buy pickup trucks is now being applied to today's quintessential suburban passenger vehicle.

The law gives people who qualify an immediate deduction of as much as $24,000 -- which grows to $25,000 next year -- off the price of an SUV. Plus, until 2004, there is a bonus deduction of 30 percent of the rest of the cost of the truck. Both these deductions are on top of the regular five-year depreciation that would apply to light trucks bought as business transportation.

The only catch: To get all these breaks, you have to buy a truck that weighs over 6,000 pounds. The Chevy Suburban makes it, but the Chevy Blazer does not.

It adds up to a significant price cut. Ford Motor Co.'s Land Rover Range Rover, for instance, has a list price of $71,865, but the combined tax breaks effectively knock $21,560 off the price, over the course of five years, assuming a tax rate of 30 percent.

The deduction, described in an article Wednesday in the Detroit News, comes at a time of mounting debate over U.S. dependence on foreign oil. SUVs and pickups typically are far less fuel-efficient than passenger cars. That discrepancy -- and the debate over automotive greenhouse-gas emissions -- has become an increasingly hot political issue since light trucks now account for about half of the total U.S. new-vehicle market.

Critics call it a loophole big enough to drive an SUV through. Mark Sherrard ordered a Chevrolet Suburban in October to take advantage of the accelerated tax breaks after his accountant told him about them. With a discount on the vehicle courtesy of his brother who works at General Motors and the zero percent financing offer GM was offering, he didn't need to think about it long.

"I wanted to get a new vehicle anyway," says Sherrard, a doctor who lives in Monroe, Mich. "Frankly, it was a no-brainer."

For years, federal law has allowed business owners to depreciate cars and trucks just like any other kind of equipment, letting owners depreciate bigger chunks in the early years, and the full value over five years. But in 1984, concerned that too many people were claiming the family car as a business expense, the government sharply limited car depreciation. Those limits do not apply to light trucks.

"You have a Christmas present here," says Aileen Roder, program director for Taxpayers for Common Sense, a nonpartisan Washington, D.C., budget watchdog group that opposes the SUV credit. She estimates the light-truck tax break costs the federal government between $840 million and $987 million yearly, making it "one of the largest tax breaks per capita" on the federal books.

Despite hand-wringing in Washington over U.S. dependence on foreign oil, the tax deduction for fuel-thirsty light trucks is larger than existing tax breaks for fuel-efficient cars. Owners of hybrid gas-and-electric cars -- Honda Motor Co.'s hybrid version of the Civic, and Toyota Motor Corp.'s Prius -- get a $2,000 tax deduction. Proposals to boost the hybrid tax break were part of a Senate energy bill that stalled this year.

For now, however, the light-truck tax break remains on the books. Several dealers contacted were unaware of it -- but eager to find out more to use it as a sales tool.

Mike Malek, tax partner at Michigan-based accounting firm Plante & Moran, says he makes sure that all his clients are aware of the break. Although the deduction rarely persuades a luxury-car buyer to buy a truck instead, it sometimes persuades people to pick a big SUV instead of a smaller one, he says.

"If a client is looking at purchasing a Navigator versus another luxury vehicle for the same amount, we would make sure they understand they get a deduction quicker on the heavier vehicle," Malek says.

Several environmental activists say they are considering mounting an effort to close what they consider a tax loophole for light trucks. "It's an inexcusable boondoggle for Detroit," says Dan Becker, director of the Sierra Club's global-warming and energy program.

Still, he says, environmentalists have regarded other issues as more important. He also notes that tax breaks are typically tough to erase once they are on the books.


© 2002 Wall Street Journal

 

Another article here:http://www.detnews.com/2002/autosins.../c01-38875.htm

It may be a repeat of previously posted material.

GAV10 Mark

 

i have been advised that an f250 (and of course f350) will absolutely qualify for this deduction. it was actually designed for trucks and vans, not suvs. the deduction has been around for years and only now that suvs are taking advantage is it now coming under scrutiny. (like the "what would jesus drive?" commercials).

the way i understand it, its a great opportunity to get a great truck & a tax break. the catch remains though, it has to qualify as a "business vehicle" and can't be your daily driver/passenger car. the irs has a set of rules that you must meet to qualify.

 

Wow, the benefits of having a good accountant!

I know that when my Dad and I were running a small construction/excavation company Revenue Canada (our IRS) was pretty sticky about vehicle deductions.

In order to be able to write off the expenses of a company vehicle it could not be a "passenger vehicle" and had to be used at least 90% (I think?) for commercial purposes. By the actual letter of the law I had to remove the rear seats from the supercab to qualify (I never did of course). Even then you could only write off expenses of operation up to $0.40/km (I think that's the number, it's been a while) and depreciate the value of the vehicle by 30% a year.

I'd say you guys have it just a little better! Everyone on this board should go out and buy a new truck before they close the loophole!

Waxy

 

i did forget to mention some of the bad things....such as getting a commercial ins. policy ($$$$) vs. a regular policy. and if you plow you also need a liability policy (at least another $750). some other local & state taxes are higher for commercial vehicles as well. and the dump charges much more for permits & dumping. so the deduction is great...but there are some catches. i typically find a way around some of these, but the fees can add up.

by the way....that is my license plate, loophl

(my girlfriend teases me as says people think it stands for lou & phil - hah hah, she's a jerk! again, just kidding)

 

http://www.caranddriver.com/xp/Caran...i_loophole.xml

Damn damn damn. Well for next year at least, if it passes.