Latest info on the 2005 SUV Tax loophole-Is it dropping to only $3,000?

Tax Rules about Sports Utility Vehicles (SUV) are Confusing

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.

CAUTION: Congress is currently considering reducing the $25,000
limitation on large SUVs down to approximately $3,000 in the first year. This would put the deduction for the large SUVs on an even footing with regular car depreciation. Any changes to
this $25,000 figure would probably be effective on the day the bill is signed by the President, or possibly an effective start date of January 1, 2006. If you're going to buy one of these heavy vehicles, my advice is sooner rather than later.

Full article here

*AutoSpies.com does not give out tax advice. Please consult your financial planner before you make any financial decisions.

DiamondJim - 11/23/2005 1:32:10 PM

+1 Boost

when i tried doing this a couple years ago, my tax guy says to me, "why would you want to do this? you're gonna pay triple in insurance rates for a company car and you are forced to keep a log of all your mileage between company and personal use like driving to and from home in case u have to present it." don't know if others have the same experience or if i could've gotten better advice from someone else, but i never went thru with. and if they cut it down to $3K, it defintely won't be worth it.

RavenR1 - 11/23/2005 1:46:26 PM

+1 Boost

this happens alot. I have a neighbor that has an H2 for his company truck......he's a plumber!!

GregWinOregon - 11/23/2005 8:42:19 PM

+1 Boost

While Hummers and such are always mentioned in relation to this, even medium-size SUVs like my Mercedes ML350 qualify, because many have a GVW over 6,000 lb. With most medium ones running 4,500 - 5,000 lb. cub weight, it's easy for gross to go over 6,000.