Section 179 tax credit...

[Poacher]

Originally Posted by EJCX5

It's not the actual weight of the vehicle from my understanding...but the GVW needs to be >6000#. The X5 is on several lists of qualifying vehicles and the vehicle apparently has labeling to state it qualifies as per the dealer.

thanks for clarifying ... I checked on the nhtsa website (nhtsa.dot.gov) ...
found the following:
"The Gross Vehicle Weight Rating (GVWR) is the amount recommended by the manufacturer as the upper limit to the operational weight for a motor vehicle and any cargo (human or other) to be carried."

[skarletknite]

For example, say you spend $60,000 in 2006 to buy a new Cadillac Escalade that is used 100% in your business. You can generally claim the following first-year deductions on your business's 2006 federal return: the $25,000 Section 179 writeoff plus $7,000 worth of regular depreciation [20% x ($60,000 - $25,000)]. So your first-year depreciation deductions add up to $32,000, or about 53% of the new Escalade's cost. This is a far better deal than if you spent the same $60,000 on a new BMW used 100% for business (in that case, your first-year depreciation writeoff would be limited to about $3,000 under the so-called luxury auto depreciation limitations).

source: http://www.smartmoney.com/tax/workbu...=smallbusiness

[marcx5]

Originally Posted by skarletknite

For example, say you spend $60,000 in 2006 to buy a new Cadillac Escalade that is used 100% in your business. You can generally claim the following first-year deductions on your business's 2006 federal return: the $25,000 Section 179 writeoff plus $7,000 worth of regular depreciation [20% x ($60,000 - $25,000)]. So your first-year depreciation deductions add up to $32,000, or about 53% of the new Escalade's cost. This is a far better deal than if you spent the same $60,000 on a new BMW used 100% for business (in that case, your first-year depreciation writeoff would be limited to about $3,000 under the so-called luxury auto depreciation limitations).

source: http://www.smartmoney.com/tax/workbu...=smallbusiness

huh?? what is the difference between a bmw and escalade.... assuming the previous post is correct that the x5 counts as over 6000 lbs (can someone verify??), then there is no difference, right??

[chor]

Originally Posted by skarletknite

For example, say you spend $60,000 in 2006 to buy a new Cadillac Escalade that is used 100% in your business. You can generally claim the following first-year deductions on your business's 2006 federal return: the $25,000 Section 179 writeoff plus $7,000 worth of regular depreciation [20% x ($60,000 - $25,000)]. So your first-year depreciation deductions add up to $32,000, or about 53% of the new Escalade's cost. This is a far better deal than if you spent the same $60,000 on a new BMW used 100% for business (in that case, your first-year depreciation writeoff would be limited to about $3,000 under the so-called luxury auto depreciation limitations).

source: http://www.smartmoney.com/tax/workbu...=smallbusiness

I don't think there's any diff between escalade and Bmw...As long as your vehicle GVW is 6000 lbs or more your first year depreciation is 25k...I don't know about the 20% depreciation for first year..Do we have any CPA on this forum that can clear this????

[skarletknite]

The luxury-automobile depreciation rules, as modified by the Job Creation and Worker Assistance Act of 2002, the Jobs and Growth Tax Relief Reconciliation Act of 2003 and revenue procedures 2003-75 and 2004-20, apply to vehicles that are used as a means for transportation on public roads, weigh 6,000 pounds or less and are not used to transport persons for hire.
Vehicles that have business use but do not meet these criteria are not subject to the depreciation limits imposed on luxury autos, but instead are depreciated according to the rules for equipment in general. A Hummer, for example, is not affected by the luxury-automobile rules because it is too heavy, so if it is used solely for business purposes, up to $100,000 of its total cost can be expensed due to IRC section 179’s immediate expensing rules. Similarly, up to $100,000 of the cost of a taxicab, a hearse or a forklift truck can be expensed in the first year since these vehicles do not meet the luxury-car criteria.
Luxury-vehicle classifications. Neither the 2002 nor the 2003 tax acts changed the first-year depreciation limit for used luxury cars. That limit is inflation-adjusted and was set by the IRS at $2,960 for 2004 (it was $3,060 for 2002 and 2003). The 2002 act increased the maximum first-year depreciation for only new cars; the 2003 act further increased this amount. Then revenue procedure 2004-20 (for vehicles placed in service in 2004) and revenue procedure 2003-75 (for vehicles placed in service in 2003) divided nonelectric vehicles into two categories: passenger vehicles, and trucks and vans on a truck chassis. For trucks and vans on a truck chassis, $300 was added to the passenger vehicle first-year deduction limit. Consequently, there now are six categories of luxury vehicles:
Used passenger cars.
Used trucks and vans on a truck chassis.
New passenger cars.
New trucks and vans on a truck chassis.
Used electric cars.
New electric cars.

so i guess its back to the 6000lb interpretation.

[marcx5]

so now i'm completely confused. clearly the x5 does not weigh more than 6000 lbs. BUT, if it is listed as a gvw of 6008, does it then qualify?

how can we confirm?

[chor]

X5 GVW does weight more than 6000 lbs so it does qualify.....

[AutoXer]

Originally Posted by marcx5

so now i'm completely confused. clearly the x5 does not weigh more than 6000 lbs. BUT, if it is listed as a gvw of 6008, does it then qualify?

how can we confirm?

They go on GVW, so the X5 does qualify. I took it when I purchased the vehicle and my CPA concurred with no issues.

[wch]

Originally Posted by AutoXer

They go on GVW, so the X5 does qualify. I took it when I purchased the vehicle and my CPA concurred with no issues.

Does this apply to the 3.0 model? Looking at http://www.forbesautos.com/research/...s/2007/bmw/x5/

the GVWR for the 3.0 is 5,963 and the 4.8 is 6,173 lbs.

[AutoXer]

Originally Posted by wch

Does this apply to the 3.0 model? Looking at http://www.forbesautos.com/research/...s/2007/bmw/x5/

the GVWR for the 3.0 is 5,963 and the 4.8 is 6,173 lbs.

Interesting! The specs on the 3.0 changed for 2007. It's always been 6008 lbs on the E53.

Based on this info, the 2007 X5 3.0 does not qualify. Anyone else out there feel the same?