Just picked up my 35d

[ABMW]

Originally Posted by z2g

OP,
Don't get offended by Thunder22's (or any other members) comments. It's all part of an online forum community. When you post a question or rant on any forum, you're going to get responses that agree with you and disagree with you. You're not always going to get sugar-coated answers that's going to "pat you on the back".

I thought Thunder22's comments were just that.....tough love, honest, concise, and to the point. You may not like reading it, but you know what they always say, the truth hurts sometimes.

About having to purchase the car this year or losing $45k to the government, I don't think that's the case. If the $45k that you're talking about is the sum you had to spend as a business expense, then you would have only lost money on taxes on that $45k.....roughly $13k. For some ppl (like myself), any extra "bonus" that I get at the end of the year due to higher-than-expected gross profits of my business, I often put some of it into my SEP IRA. Hence, it's NOT taxed until after I retire.

Either way, as others have tried conveying to you, it was your fault in the end. Because, no one put a gun to your head. As far as Thunder22 having over 6000 posts, good for him. You know he's an avid BMW aficionado and Xoutpost regular instead of a newbie who's just trying to be a troll.

As you can see at the bottom of my thread, I'm hardly offended. I do not take anything on Internet forums personally. They're for entertainment only. Had I not been bored last night I would not have responded.

Though, of note, your understanding of my tax situation is incorrect. Please reread it. I tried to make it pretty clear, as there are many others on this board who have specifically asked about Obama's "new for 2009" bonus accelerated depreciation scale, that is part of the economic stimulus package that was passed earlier this year.

If it were a matter of saving $13k, I would have purchased an M3, not a 6,000 GVWR SAV that is required to qualify for the bonus depreciation.

In fact, I am saving just over $45k, actually, specifically by purchasing this SUV. But in my case it is used for 95% to 100% business (the IRS allows small personal trips within 1 or 2 miles to be driven in a 100% business use vehicle, but frequent trips over 10-miles for personal use are borderline) Anyway, I still am responsible for a very large chunk come April. Though, those are the breaks and one can only be so prudent.

I live in the Bay Area, and while my household income (my wife's and mine) would be considered extraordinarily high elsewhere in the country, we're in a city of $3,000 to $4,000 rent for a small 2 bedroom in a "safe" area that allows dogs, and includes parking, if you're lucky.

Thus, small bits adds up.

Again, my qualm is not in paying MSRP and perhaps I should modify the title of my thread or make that more clear in my original post. My qualm is in the blatant lies that were being told, by the sales manager, in front of his own salesman who was not even agreeing with him.

My issue is with the experience, as a whole. I'm being pretty clear about this. Naturally I expect a hard-sale when I walk into a car dealership. But, as someone who is extremely involved in the community, and in sales, the reason for my post is that I find unethical behavior to be deplorable and I have little tolerance for it.

Again, I expect car dealers to be tough, naturally and "duh," but as stated earlier: having purchased well over 20+ cars over the last dozen years, not to mention a good 9 to 10 motorcycles, I've never been faced with a manager who had the gall to straight up lie about a factual document in front of him. We even pulled up his comments on BMW's website to confirm he was being untruthful and that we weren't going crazy, as his behavior was so bizarre.

So, my thread is hardly trolling. It's a mere warning to others to steer clear of a specific Bay Area dealership, based upon factually occurring events.

As a friendly side note: trolling aside, do yourself a favor and consult with your accountant about taking a 90% or 100% depreciation for your X5. If you bought it new this year, your eligible, and it sounds like you own your own business. Maybe you did not gross enough for it to be worth it or you have enough deductions that you need not take another, or you do not use your vehicle specifically for business, but if you do, it's worth a phone call.

If he/she (your accountant) is not aware of it, call a different person- again just friendly and sincere advice.

This thread is becoming more silly by the moment, so I'll try not to respond to further threads on this specific topic. But, again, in closing my issue is not with the salesman. He was excellent. My issue was specifically with the behavior of the sales manager and his unethical behavior. I paid MSRP, and it's my fault, but again I could care less. Heck, I would have paid $1k over, if I had to. It's a great truck. But, I have no regrets in posting this warning to steer clear of a dealership that is managed by someone who lacks ethics or at least displayed no sense of ethics in my dealings with him.

Cheers and Happy Holidays!

[jaaX3]

Originally Posted by ABMW

This thread is becoming more silly by the moment, so I'll try not to respond to further threads on this specific topic.
Cheers and Happy Holidays!

Since this thread is done (as OP mentioned above), this came to mind:

[z2g]

OP,
I have an accountant. I am also a business owner who makes well over the amount that Obama considers the upper 5% of the population. I also live in the S.F. Bay Area. So, I'm in the same boat as you.

Regarding my tax comment to you, that was why I mentioned/asked whether that $45k was the total taxable bonus you received or was it your actual tax savings. Because, if it is the former, then you would be taxed on that $45k and it doesn't mean that buying the car "saved" you $45k that would have gone to the IRS.

By the way, are you incorporated? If so, did you purchase the car under the corporate name and insure the car under the corporation?

And, I don't know why you're getting belligerent with me. I thought my post was rather cordial.

[bigx5er]

Originally Posted by ABMW

Though, of note, your understanding of my tax situation is incorrect. Please reread it. I tried to make it pretty clear, as there are many others on this board who have specifically asked about Obama's "new for 2009" bonus accelerated depreciation scale, that is part of the economic stimulus package that was passed earlier this year.

If it were a matter of saving $13k, I would have purchased an M3, not a 6,000 GVWR SAV that is required to qualify for the bonus depreciation.

I get why you wanted to grab your tax savings, but I still find it odd that you didn't walk if the sales manager was that miserable. There are many dealers out there who are all anxious to sell X5s (if they have them).

Your math on the tax savings has me scratching my head like the previous poster. You are talking about a section 179 deduction. Or in other terms, accelerated depreciation. If you are having a good year, accelerated depreciation can be a good thing. But where I don't follow you is that deductions are against income, so even if you could deduct 100% of the purchase price, you would end up around 20K in a 36% bracket. To get to 45K would mean you were in a 80% bracket. The 6000 GVWR merely gets you by a federal limit on business car expenses, it has nothing to do with the current 2009 accelerated depreciation rules.

If there is some other creative way to handle the taxes, I would be interested to learn it. You would be best to site the rules online somewhere instead of just telling people to keep calling until they get the answer they want.

We look at section 179 each year. For you tax fans, here is a good reference:

Qualifying for the 2008 Section 179 Tax Deduction | Section179.org

I'm fine with calling a spade a spade, but something smells fishy here (and note I only have around 200 posts)

[ABMW]

Originally Posted by bigx5er

I get why you wanted to grab your tax savings, but I still find it odd that you didn't walk if the sales manager was that miserable. There are many dealers out there who are all anxious to sell X5s (if they have them).

Your math on the tax savings has me scratching my head like the previous poster. You are talking about a section 179 deduction. Or in other terms, accelerated depreciation. If you are having a good year, accelerated depreciation can be a good thing. But where I don't follow you is that deductions are against income, so even if you could deduct 100% of the purchase price, you would end up around 20K in a 36% bracket. To get to 45K would mean you were in a 80% bracket. The 6000 GVWR merely gets you by a federal limit on business car expenses, it has nothing to do with the current 2009 accelerated depreciation rules.

If there is some other creative way to handle the taxes, I would be interested to learn it. You would be best to site the rules online somewhere instead of just telling people to keep calling until they get the answer they want.

We look at section 179 each year. For you tax fans, here is a good reference:

Qualifying for the 2008 Section 179 Tax Deduction | Section179.org

I'm fine with calling a spade a spade, but something smells fishy here (and note I only have around 200 posts)

My income is substantially higher than $45k. That is the confusion you all are confusing, I believe. Magnify it by many magnitudes. I also file jointly with my wife.

Thus, a $65 to $70k deduction at my tax rate of 56% helps me a great deal.

33% federal Tax Rate + 15% self - Employment Tax Rate + 9% CA Tax.

My total income is in the mid 6-figures when combined with my wife's. The $65 to $70k deduction doesn't really toss us into a lower tax bracket, but it helps with not having to pay taxes on that amount of income at my tax rate.

In other words, as a hypothetical example: Imagine I made $100k. I purchased a vehicle for $70k for business that allowed me to deduct the full 100% (or depreciate the full 100% the first year-2009). My effective income then drops to $30k. My tax rate on 30k, due to my wife's income is still 50%.

The math works well. I'm displaying the above as a hypothetical example to assist others, as I know there are many in the same boat as am I.

If it's complicated, that's the point. IRS code is not fun, but it helps to be married to one who's a smart gal with a certain advanced degree that everyone loves to hate. You all can figure out what degree that is, I'm sure. But, for the record, she hates it to, so don't let your kids ever take the LSAT and as a final note, the figures are 100% correct for MY situation.

If you're coming up with differing figures, your math or interpretation is incorrect, but I can refer you to a very good individual who can assist.

Really, I'd like to help, so don't hesitate to PM me on this matter. If you use your X5 for business, and you bought it new this year, I strongly encourage you to at least investigate the option of accelerated bonus depreciation that's available to you.

Best

[ABMW]

P.S. the link you posted was to the 2008 179 deduction.

It changed DRAMATICALLY in 2009. 2008 has no relevance to 2009, whatsoever, in terms of this particular subject.

Just FYI.

But, I'm not an accountant, I leave that to the pros, so I think I've said my peace. If anyone wants to connect with a great accountant and you run your own business 100%, I'd be happy to assist you.

Nothing to gain here, beyond a simple good deed.

[bigx5er]

Originally Posted by ABMW

P.S. the link you posted was to the 2008 179 deduction.

It changed DRAMATICALLY in 2009. 2008 has no relevance to 2009, whatsoever, in terms of this particular subject.

Just FYI.

But, I'm not an accountant, I leave that to the pros, so I think I've said my peace. If anyone wants to connect with a great accountant and you run your own business 100%, I'd be happy to assist you.

Nothing to gain here, beyond a simple good deed.

Read the entire page, 2009 is at the bottom. Accelerated depreciation is a general accounting concept. 2009 was an extension of the 2008 changes. See the first page Section 179 Tax Deductions for 2009 | Section179.org

[z2g]

ABMW,
Odd....I've spoken to my CPA and other ppl. They've all mentioned that for business auto purchases, the car has to be insured as a commercial vehicle under the business name. One of those ppl is also my insurance agent.

So, I don't know what's going on.

[ABMW]

Originally Posted by z2g

ABMW,
Odd....I've spoken to my CPA and other ppl. They've all mentioned that for business auto purchases, the car has to be insured as a commercial vehicle under the business name. One of those ppl is also my insurance agent.

So, I don't know what's going on.

What's going on is that they're incorrect. In California there are only paragraphs of tax code included in the education required to become an agent. In fact the entire class takes only 1-week.

The exam is a joke and could probably be passed by the majority of individuals on this board whom have a college degree and the slightest bit of financial sense. That's not to say it's not an honorable job, but don't take advice from your insurance agent as it relates to your tax liability, if you can avoid it.

In terms of your CPA, he or she is also wrong. The "Sports Utility Vehicle," which is an official definition used by the IRS must be 6,000 lbs GVWR or above to qualify for advanced depreciation, must be purchased for your business, and must be put in service by 12/31/09.

It's an area of tax code that the vast majority of tax payers do not qualify for, including most small business owners. If your CPA doesn't commonly confront this issue, there's every reason to believe he's in error. It doesn't make him a bad CPA, but it always helps to work with someone who is familiar with your particular line of work and the specific tax benefits that are available to you.

For example, in my line of work my car is literally a roaming office. I frequently drive 100 to 200 qualified business miles each day when things are "happening."

I'm not saying your CPA is wrong. He may be correct for your particular situation. But, if you meet certain criteria, as do I, you're eligible to take advantage of many new benefits that were introduced for the 2009 tax year.

The ability to deduct the sales tax on new car purchases, for example, is but one small incentive. For a $70k SUV in CA, where the tax rate is near 10% that adds up to $7,000 in deductions.

Anyway, good CPAs are hard to find, just as good doctors and good lawyers are. As well, unless you are an attorney or a very qualified CPA, you're not going to understand tax code well enough to determine much, when you find yourself in a complex tax situation. The publications are one thing, but researching tax court case law in order to determine, if you'll qualify for a particular deduction in the event of an audit is another issue all together.

Hence, while good CPAs and tax attorneys are not cheap, if you owe a high tax liability (over $75 to 100k per year) it can make a world of difference to seek the advice of a pro.

If purchasing an X5, makes sense, and you "in effect" get it half-way paid for, so much the better. You can even take a capital loss on your past vehicle if you've not fully depreciated it in the past, so trading it in for a loss or selling it for a loss can actually create a gain, in some cases.

Good luck and call your CPA! You have 8'ish days left!

:-)

[z2g]

Originally Posted by ABMW

What's going on is that they're incorrect. In California there are only paragraphs of tax code included in the education required to become an agent. In fact the entire class takes only 1-week.

The exam is a joke and could probably be passed by the majority of individuals on this board whom have a college degree and the slightest bit of financial sense. That's not to say it's not an honorable job, but don't take advice from your insurance agent as it relates to your tax liability, if you can avoid it.

In terms of your CPA, he or she is also wrong. The "Sports Utility Vehicle," which is an official definition used by the IRS must be 6,000 lbs GVWR or above to qualify for advanced depreciation, must be purchased for your business, and must be put in service by 12/31/09.

It's an area of tax code that the vast majority of tax payers do not qualify for, including most small business owners. If your CPA doesn't commonly confront this issue, there's every reason to believe he's in error. It doesn't make him a bad CPA, but it always helps to work with someone who is familiar with your particular line of work and the specific tax benefits that are available to you.

For example, in my line of work my car is literally a roaming office. I frequently drive 100 to 200 qualified business miles each day when things are "happening."

I'm not saying your CPA is wrong. He may be correct for your particular situation. But, if you meet certain criteria, as do I, you're eligible to take advantage of many new benefits that were introduced for the 2009 tax year.

The ability to deduct the sales tax on new car purchases, for example, is but one small incentive. For a $70k SUV in CA, where the tax rate is near 10% that adds up to $7,000 in deductions.

Anyway, good CPAs are hard to find, just as good doctors and good lawyers are. As well, unless you are an attorney or a very qualified CPA, you're not going to understand tax code well enough to determine much, when you find yourself in a complex tax situation. The publications are one thing, but researching tax court case law in order to determine, if you'll qualify for a particular deduction in the event of an audit is another issue all together.

Hence, while good CPAs and tax attorneys are not cheap, if you owe a high tax liability (over $75 to 100k per year) it can make a world of difference to seek the advice of a pro.

If purchasing an X5, makes sense, and you "in effect" get it half-way paid for, so much the better. You can even take a capital loss on your past vehicle if you've not fully depreciated it in the past, so trading it in for a loss or selling it for a loss can actually create a gain, in some cases.

Good luck and call your CPA! You have 8'ish days left!

:-)

Thanks for the info. I was reading over all the posts here regarding section 179. I think when I spoke to my cpa a few months back, she wasn't aware that our new car was going to qualify for that. I'll make sure to mention it to her. I did some quick research online on section 179 and I think it can pertain to my business.

Is there a time limit on when I have to file for the section 179 deduction or do I do it with my corporate taxes at the beginning of the year?