OT: Ridiculous SUV tax break!
#1
Racer
Thread Starter
Join Date: Jan 2002
Location: Orange County, CA
Posts: 364
Likes: 0
Received 0 Likes
on
0 Posts
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
I had previously heard about the write-off of up to $100K for vehicles weighing over 3 tons. It was meant to be a bone tossed by Bush to farmers and small businesses but had also been duly noted by the SUV buyers who have taken advantage of this loophole in the tax code.
I assumed that Hummer,Suburban, and Tahoe owners were the likely beneficiaries, but was surprised to learn from a collegue today that the BMW X5 weighs in at 6006lbs! What a coincidinky heh?
This is so wrong I know but with the Senate talking about repealing this allowance, maybe it's a good time to take the new Valvetronic V8 315HP 4.4i out for a test drive. (supposed to get 16/21 MPG)
Anyone have any opinions on the Bimmer? I had promised myself that I would never ever buy an SUV, but this looks like a deal worth looking into no?
I assumed that Hummer,Suburban, and Tahoe owners were the likely beneficiaries, but was surprised to learn from a collegue today that the BMW X5 weighs in at 6006lbs! What a coincidinky heh?
This is so wrong I know but with the Senate talking about repealing this allowance, maybe it's a good time to take the new Valvetronic V8 315HP 4.4i out for a test drive. (supposed to get 16/21 MPG)
Anyone have any opinions on the Bimmer? I had promised myself that I would never ever buy an SUV, but this looks like a deal worth looking into no?
#2
Rennlist Member
![](https://rennlist.com/forums/images/ranks/veteran_army.png)
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
DrZ, check with your tax accountant. This break has been around since 1996. More likely the result of successful lobbying than any bone tossing by this or the last President.
http://www.usatoday.com/money/autos/...ax-break_x.htm
http://www.usatoday.com/money/autos/...ax-break_x.htm
#3
Rennlist Member
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
You should hurry. I recall hearing that this is the last year you can take advantage of this break so you should hurry. And while I'm not a big fan of SUVs, you really would be silly not to consider it if you can take advantage of it.
I know 2 guys that bought SUVs this year because of the tax break.
Thanks,
Peter
I know 2 guys that bought SUVs this year because of the tax break.
Thanks,
Peter
#4
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
I took advantage of this section 179 deduction in 1996. Keep in mind the following factors. First to be an advantage you are either self employed or partner or majority stockholder in your corporation. Second, this loophole only accelerates the depreciation expense into the first tax year. When your company sells this vehicle they pay capital gains on the amount you sell it for. (Assuming you kept it long enough to be fully depreciated.) In practice you are only delaying the payment of the tax until you dispose of it. Your tax burden is still the same, just delayed.
#5
Race Director
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
Actually, besides the accelerated section 179 expense during the first year, I believe you do not have to follow the luxury auto depreciation rule ($3,400 per year?) during the succeeding years as well.
Any vehical with gross vehical weight (GVW) in excess of 6,000 lbs will qualify. The tax logic (oxymoron at it's best) is that now this is a 'work' vehical, and not just a car (ala for transportation only). The GVW is listed on the door jam sticker. I'm sure the Cayenne Turbo will qualify.
Actually the luxury auto depreciation rule came into being in 1985 when Reagan bartered with congress to lower the top federal marginally tax rates to 35%. That's also when they introduced the infamous Alternate Minimum Tax (ATM) in the same tax legislation. The idea is to rid the 'rich' of their tax loopholes. Technically, in 1984, one can fully depreciate a Rolls Royse in 5 years. back then most vehicals with GVW in excess of 6,000 lbs were indeed work trucks. The fact that the SUV now benefit is more of the luck of the draw.
CP
Any vehical with gross vehical weight (GVW) in excess of 6,000 lbs will qualify. The tax logic (oxymoron at it's best) is that now this is a 'work' vehical, and not just a car (ala for transportation only). The GVW is listed on the door jam sticker. I'm sure the Cayenne Turbo will qualify.
Actually the luxury auto depreciation rule came into being in 1985 when Reagan bartered with congress to lower the top federal marginally tax rates to 35%. That's also when they introduced the infamous Alternate Minimum Tax (ATM) in the same tax legislation. The idea is to rid the 'rich' of their tax loopholes. Technically, in 1984, one can fully depreciate a Rolls Royse in 5 years. back then most vehicals with GVW in excess of 6,000 lbs were indeed work trucks. The fact that the SUV now benefit is more of the luck of the draw.
CP
#6
Three Wheelin'
Join Date: Jun 2003
Location: San Francisco Bay Area
Posts: 1,572
Likes: 0
Received 0 Likes
on
0 Posts
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
Originally posted by DrZ
This is so wrong I know but with the Senate talking about repealing this allowance, maybe it's a good time to take the new Valvetronic V8 315HP 4.4i out for a test drive. (supposed to get 16/21 MPG)
This is so wrong I know but with the Senate talking about repealing this allowance, maybe it's a good time to take the new Valvetronic V8 315HP 4.4i out for a test drive. (supposed to get 16/21 MPG)
179 has been around for years but the accerated aspect has been in effect since May03. I have been told that when you sell the vehicle you pay ordinary income tax on the proceeds. It's a deferral of tax and not that big a deal if you do the arithmatic. There are lots of tax inequities and this is minor.
My S was purchased because of the deduction, and I use it to haul tools and material to construction sites. For me it is a work vehicle.
Geo W, wanted to boost the economy and he did, ask my salesman and the dealer.
#7
Addict
Rennlist Member
Rennlist Member
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
It has been around for years and the only thing that changed in May was the amount of the deduction.
When you dispose of the vehicle, the disposition price is treated as income in the year the vehicle is disposed of. It can be offset by the new purchase of another qualifying vehicle.
When you dispose of the vehicle, the disposition price is treated as income in the year the vehicle is disposed of. It can be offset by the new purchase of another qualifying vehicle.
Trending Topics
#8
Racer
Thread Starter
Join Date: Jan 2002
Location: Orange County, CA
Posts: 364
Likes: 0
Received 0 Likes
on
0 Posts
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
Thanks all for your input, I knew about the law but did'nt think a "SAV" like the X5 would qualify and the accelerated depreciation schedule was part of Bush's economic stimulus package with is currently being debated in congress and perhaps subject to repeal.
I generally drive a car until it is mush. My 97 e420 has 126K mile as well as a CEL due to the same SAI problem as some of the RListers have. Considering that the registration is up in December (with the tripled fees) and the new smog certification process, it may be a good time to trade it for the new X5.
Anyone have experience with it, good or bad as a daily driver?
I generally drive a car until it is mush. My 97 e420 has 126K mile as well as a CEL due to the same SAI problem as some of the RListers have. Considering that the registration is up in December (with the tripled fees) and the new smog certification process, it may be a good time to trade it for the new X5.
Anyone have experience with it, good or bad as a daily driver?
Last edited by DrZ; 11-01-2003 at 02:45 PM.
#9
Addict
Rennlist Member
Rennlist Member
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
Accelerated depreciation has been around for years - the $100,000 limit was part of the package. If the law is changed, it will NOT be retro-active as the wording in the bill states that the effective date is the date it is passed into law.
ANY vehicle with a GVWR of OVER 6000 pounds qualifies as long as it meets the usage requirements.
I choose the Cayenne Turbo over the X5 (had one before and the Cayenne is far better).
ANY vehicle with a GVWR of OVER 6000 pounds qualifies as long as it meets the usage requirements.
I choose the Cayenne Turbo over the X5 (had one before and the Cayenne is far better).
#10
Addict
Rennlist Member
Rennlist Member
Join Date: Jan 2003
Location: Rancho Santa Margarita, California
Posts: 378
Likes: 0
Received 0 Likes
on
0 Posts
![Default](https://rennlist.com/forums/images/icons/icon1.gif)
Range Rovers count too, just got a solicitation from the dealer. Different kind of vehicle than a Cayenne or X5. British ancestry with German(BMW) influences.