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.
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