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View Full Version : 6000 lb SUV tax credit ... lease, buy or both? new, old or either?


eVolcre
Mar 29, 2003, 09:09 PM
Hi All,

The forum was so helpful with my powerbook purchase, I thought I'd throw this out there as well ...

For those familiar with the tax loophole that allows a 'business' a HUGE depreciation tax CREDIT for purchase of a +6000 lb "truck" (navigators, range rovers, escelades also qualify ... hence loophole) ...

Does the vehicle have to be brand new for the year the depreciation is claimed?

Can a used behicle be purchased in 2003 (now) and still qualify for all the depreciation credits for this tax year?

Does it matter if the vehicle is leased or does it have to be purchased ...

Thanks!

For those who have no clue what this credit is ... drop a line ... I'll add info.

EV

DakotaGuy
Mar 29, 2003, 09:35 PM
I thought I would throw this out the actual curb weight doesn't have anything to do with depreciation of the vehicle, it is all about GVWR, (Gross Vehicle Weight Rating). You might be able to get a small write off on a large SUV, but generally the write off is geared to Pick-up trucks which have a much larger GVWR then SUV's and more likely to be used for farming or business.

eVolcre
Mar 29, 2003, 09:48 PM
generally the write off is geared to Pick-up trucks which have a much larger GVWR then SUV's and more likely to be used for farming or business.

You and I might be saying the same thing , but let me run some numbers and it definitely isn't a 'small writeoff'. Buying (or leasing if someone answersmy question), a 2003 Hummer H2: USD 56k, lets me write off ... 34k the first year resulting in a tax SAVING of $12k.

That isn't small.

The Hummer qualifies .... it's > 6000lbs, curb weight or gross weight or whatever , I know it qualifies.

It might be 'geared' toward pickups but that's why Ipointed out the loophole ... it works for luxury SUV's as well.

So , fogetting weight for a second and assuming the car I'm looking at qualifies .... what's the used, new, lease or buy answer?


<edit>

I've copied a post from another forum ....

Hybrid vehicle purchases already qualify for a federal tax deduction of $4,000 through 2003 and a smaller deduction through 2006. Some states offer additional tax deductions on top of that. Here's a good article about the 1996 law that made the SUV/light truck tax breaks possible: SUV, truck owners get a big tax break http://www.detnews.com/2002/autosinsider/0212/18/c01-38875

Here's a list of 38 eligible vehicles over 6000 pounds:
BMW X5
Cadillac Escalade
Chevy Astro
Chevy Avalanche
Chevy Express
Chevy Silverado
Chevy Suburban
Chevy Tahoe
Dodge Durango
Dodge Ram Van
Dodge Ram Maxi Van
Dodge Ram Wagon
Dodge Ram 1500
Dodge Ram 2500
Dodge Ram 3500
Ford Excursion
Ford Expedition
Ford Econoline E-150
Ford Econoline E-250
Ford Econoline E-350
Ford F-150
Ford F-250
Ford F-350
GMC Yukon
GMC Safari
GMC Savana
GMC Sierra
GMC Sierra Denali
Land Rover Discovery
Land Rover Range Rover
Lincoln Blackwood
Lincoln Navigator
Mercedes ML 320
Mercedes ML 500
Mercedes ML55 AMG
Toyota Land Cruiser
Toyota Sequoia
Toyota Tundra

<end edit>

EV

eVolcre
Mar 30, 2003, 09:25 AM
If you don't have the answer to this particular question, do you know of any tx website, besides irs.gov, where I may be able to find the answer?

Stelliform
Mar 30, 2003, 09:41 AM
I wish I could help you, but I don't know off hand. What your post has made me realize is that a tax consultant could be quite valuable. I had no idea about these write offs!

jelloshotsrule
Mar 30, 2003, 10:02 AM
how much extra would you be spending on gas with a 12 mpg truck/suv?

there are also big tax write offs for hybrid cars.

eVolcre
Mar 30, 2003, 10:02 AM
I had no idea about these write offs!

Want more? :) I am not an official tax consultant but have been doing about 10 returns a year including mine every year. For fun. I'm a numbers jockey in my day job.

It is a rare return that pays above 10% / year. All legal too.

OK , here's one for fun. Car usage. There are so many loopholes in the law that ANYONE can claim almost a 10,000 CREDIT, not a deduction mind you, but a CREDIT.

Remember, "always always Itemise deductions" ALWAYS.

Drop a line if you want details of the automobile thing. It's a nifty little loophole ...

EV

DakotaGuy
Mar 30, 2003, 10:04 AM
All I can tell you is my dad is a farmer and a few years back he bought a new Ford F150 and his account said he should have bought a Ford SuperDuty F250, F350 because they have over 8500+ GVWR and therefore the write off is much more substantial. I think the government having a tax write-off for any luxury SUV is nonsense, for the most part they would never be used for agriculture, business or construction.

Anyhow if you can write it off then do so. But I think you do have to prove it is being used for a legimate business. It is kind of like tax free "red" diesel, it is very cheap, but never get caught with it in any highway use vehicle. We had a neighbor that got stopped and they did a check on the diesel in his pick-up and it turned out to be tax free red dyed diesel and he got big fines.

I would talk to your CPA they should know all the rules about stuff like this.

eVolcre
Mar 30, 2003, 10:04 AM
Originally posted by jelloshotsrule
how much extra would you be spending on gas with a 12 mpg truck/suv?

there are also big tax write offs for hybrid cars.

When you buy a Ferrari, do you whine about oil change costs?

I'm 6'1", 200 pounds, I would look like a fool in a itty butty hybrid.

My chosies are .. Poxster, 2000 Range Rover, 2003 LandRover.

TW, 12mpg?? It's much higher than that on the Range Rover 20 I believe.

jelloshotsrule
Mar 30, 2003, 10:05 AM
ahhh. don't wanna look bad.... :rolleyes:

20 mpg or 50... hmmm. tough call

eVolcre
Mar 30, 2003, 10:08 AM
But I think you do have to prove it is being used for a legimate business.

OK, I'm getting all sorts of comments about whether the law is right or not and not a single answer. :)

Guys, it is legit. That's the bauty of loopholes. I formed a LLC 5 days ago. Shell company that owns my 'consultant business'.This LLC will be buying the truck (yes, i know it's cheating to buy a SUV but guess what, until te loophole is closed, it exists)

The 'truck' will be used for business, a $1000 junker is my 'main consumer car'. So it is being used for a business.


I think the government having a tax write-off for any luxury SUV is nonsense, for the most part they would never be used for agriculture, business or construction.

Agreed 100%. But i'm not that much of a saint not to take advantage of a loophole.

EV

eVolcre
Mar 30, 2003, 10:10 AM
20 mpg or 50... hmmm. tough call

Something tells me this thread is going to be a long tangential argument. :)

Jello, what makes you think I care about 20 or 50. Forget the ethics of war and environment, if I can afford it, to me ... it makes no difference, right?

I am not driving a cheesy little hybrid when I'm taking a customer to close a 20 million dollar contract.

Prententious ?Maybe. Realist ... definitely. I'm getting either a 03 Dscovery or a 00 Rover ....

Now, the tax law? :)

EV

Tommy!
Mar 30, 2003, 10:19 AM
Originally posted by eVolcre


I'm 6'1", 200 pounds, I would look like a fool in a itty butty hybrid.


You would look like someone who cares about pollution to me.

But right now, you're just looking pretty insecure.

e-coli
Mar 30, 2003, 11:27 AM
do what you will, but i personally find that "loophole" to be disgusting. It spits in the face of decency. A clear pandering to the auto and oil industries.

If you want to support corporate lobbying, that's your choice. But I think anyone who buys a 6000lb SUV should be automatically enlisted in the military, and have to go fight in Iraq.

Think global responsibility.

alex_ant
Mar 30, 2003, 11:44 AM
Jello, what makes you think I care about 20 or 50. Forget the ethics of war and environment, if I can afford it, to me ... it makes no difference, right?
YES!! Get the biggest, baddest mother you can afford. Don't worry about fuel efficiency or cost or any of that ****e. You can't put a cost on safety!

Consider yourself hired by the PPP. You can take over for that Christine Whitman know-nothing at the EPA.

e-coli
Mar 30, 2003, 11:51 AM
Originally posted by alex_ant
You can't put a cost on safety![/B]

SUV's are like handguns. They're dangerous to everyone else. People buy SUV's to protect themselves from other people with SUV's. It's a self-perpetuating cycle.

It's a bitter pill to me that the ones who are actively trying to do right, and be a global citizen, are being killed by the gluttons because their cars are "too fuel efficient". :mad:

GeeYouEye
Mar 30, 2003, 12:50 PM
Question: can you take 5 people + ski gear and 2 bikes anywhere with a hybrid? Or even just the bikes? Didn't think so. Want me to drive a hybrid? Put the engine in an SUV.

eVolcre
Mar 30, 2003, 01:25 PM
Originally posted by GeeYouEye
Question: can you take 5 people + ski gear and 2 bikes anywhere with a hybrid? Or even just the bikes? Didn't think so. Want me to drive a hybrid? Put the engine in an SUV.


Amen.

Thanks btw. I'm new to these forums and will keep my kid gloves on for now.

To whoever called me 'insecure' , the word 'pathetic' comes to mind in return. Reading a thread you disagree with, not having any sort of constructive opinion, and then calling an online nobody 'insecure' behing the security of your keyboard ....

Let me know what the rules in this forum are and it will be a fun fight to fight.

Till then ....

Thanks again GeeYouEye. Add 'driving across a 500 acre almond farm in your list of 'hybrid' events. The Range Rover is what I need, all loopholes and credits aside. The tax benefit is a bonus.

MacFan25
Mar 30, 2003, 01:56 PM
Originally posted by e-coli
But I think anyone who buys a 6000lb SUV should be automatically enlisted in the military, and have to go fight in Iraq.
What are you talking about? Just because someone buys an SUV, you think that they should have to fight in a war? A lot of people buy SUVs for the room, and so they can haul things, like boats. How is someone going to haul a 4,000 lb. boat with a little hybrid car?

e-coli
Mar 30, 2003, 02:22 PM
Originally posted by MacFan25
What are you talking about? Just because someone buys an SUV, you think that they should have to fight in a war? A lot of people buy SUVs for the room, and so they can haul things, like boats. How is someone going to haul a 4,000 lb. boat with a little hybrid car?

Yes, I agree with you. But a substantial percentage of those who purchase the largest SUV's are city-dwellers who use the vehicles for grocery-getting. That's pretty rediculous.

I guess I'm just disgusted that in this day and age we're giving people more justification to go out and pollute, use up unrenewable energy resources, and endager other drivers.

(btw, I've taken a ski trip with 3 people in colorado in a hyundai. Just get a roof rack). ;)

MacFan25
Mar 30, 2003, 02:32 PM
Originally posted by e-coli
Yes, I agree with you. But a substantial percentage of those who purchase the largest SUV's are city-dwellers who use the vehicles for grocery-getting. That's pretty rediculous.
Yeah, it seems that those kind of people would want a small car to save on gas money.

daniel77
Mar 30, 2003, 03:36 PM
when u say hybrid you mean like the gas electric type cars? gosh those are so ****ing ugly. all of them. honestyly. :rolleyes:

MacFan25
Mar 30, 2003, 03:41 PM
Originally posted by daniel77
when u say hybrid you mean like the gas electric type cars? gosh those are so ****ing ugly. all of them. honestyly. :rolleyes:
Now they have a Honda Civic that is hybrid. And I think that it just looks just like the regular civic, which is not bad at all.

But, some of the others are ugly.

Taft
Mar 30, 2003, 04:24 PM
I'm glad to see the lefties hijacked this thread. You saved me a lot of work.

To echo what other have said...

I agree that the tax break for these oversized gas-guzzlers is idiotic. Face it: this is the power of lobbying on display.

Also, I hope you at least consider how your decision effects the rest of the people on this planet. I'm not saying that its automatically a bad decision, but at least consider it. Making a decision like this based solely on asthetics is a bit shallow.

Taft

jelloshotsrule
Mar 30, 2003, 06:43 PM
the focus was not on the person's need for an SUV. but rather the fact that it would get him a tax write off, as well as make him look cool. not to mention the response about "well, i have the money, so i can afford to buy whatever i want"....

i don't have a problem with people who use suvs for what they are intended for.... hauling, driving off road, etc... but don't claim that that's the reason a lot of people get them...