Any reason not to contract the car before taking delivery

[bracoX5d]

Hi All,

I'd like to introduce my self, this is my first post although I've been reading the posts here for a while. I have found this site to be a great source of information, and it has kept me busy while waiting for my X5.

So I currently have on order 2010 X5 35d, Space Gray, Tobocco leather, premium package, technology package, rear climate package, and I am very excited to take delivery. However, there is a chance that I won't take delivery before new years, but I really want to take advantage of tax benefits on my 2009 taxes instead of 2010, my dealer says we can contract the car before I take delivery since we already have a VIN#. Is there any reason not to do this? Any pitfalls I should watch out for? Hopefully I won't have to do this as my car is on its way to Oxnard VPC, but I'd like to get some advice if I do have to.

[AzNMpower32]

There may be damage during shipment that's not caught at VPC, during transport, or god forbid, at the dealership. Also, there have been rare cases of ordered cars not coming as specified (wrong colour interior, trim, missing options....).

[Armand]

Originally Posted by bracoX5d

Hi All,

I'd like to introduce my self, this is my first post although I've been reading the posts here for a while. I have found this site to be a great source of information, and it has kept me busy while waiting for my X5.

So I currently have on order 2010 X5 35d, Space Gray, Tobocco leather, premium package, technology package, rear climate package, and I am very excited to take delivery. However, there is a chance that I won't take delivery before new years, but I really want to take advantage of tax benefits on my 2009 taxes instead of 2010, my dealer says we can contract the car before I take delivery since we already have a VIN#. Is there any reason not to do this? Any pitfalls I should watch out for? Hopefully I won't have to do this as my car is on its way to Oxnard VPC, but I'd like to get some advice if I do have to.

BracoX5d, Congrats on your new X5. If you want to take advantage of the business deduction, the car has to be placed in service before 12/31/2009. If the vehicle is not in your possession by then, my interpretation is that you cannot take advantage of the law. On the other hand, if you are just looking to take advantage of the sales tax deduction, I believe all you need to show is that you have purchased it by 12/31. But if you end up paying the sales tax in 2010, that could be a problem if IRS asks for proof.

In tried almost all the BMW dealerships in this area when I was looking for mine and I personally would not trust most of them to contract ahead. I trust you know your CA well.

[ABMW]

To my knowledge, and the knowledge of my accountant possession does not correlate to placed-in-service date, when you're speaking of depreciation. They're looking at the sales contract, which will indicate a placed in service date of 2009. Upon signing the purchase contract you should be fine. You can place the car in service, even though it's on a truck on its way to the dealer. It's up to you how the car is placed in service, and if you chose to have your car "in service, shipped across the country, that's up to you." I've checked with two accountants, just to be sure. I'm taking delivery on the 24th'ish, so I'm good either way.

It sounds like you and I are in the same boat. I'm taking advantage of Obama's 2009 Bonus Depreciation for 2009/2010 SUVs with GVWR 6000 and over. A $58k deduction is hard to pass up, couple that with the IRS $900 eco-credit, and the sales tax deduction, and it ends up being around $65,000 in deductions. At my business's tax rate of 56%, it's too good of a deal to pass up.

Take 100% depreciation the first year, finance the vehicle, then deduct the payment interest each year + miles! It's an incredible system way to get an awesome SUV and to have your payments made for the first 4-years (in my case), at which point I'll trade it in.

Check with your own accountant, but I've done pretty extensive research on this particular issue. Good luck!

[z2g]

Originally Posted by ABMW

To my knowledge, and the knowledge of my accountant possession does not correlate to placed-in-service date, when you're speaking of depreciation. They're looking at the sales contract, which will indicate a placed in service date of 2009. Upon signing the purchase contract you should be fine. You can place the car in service, even though it's on a truck on its way to the dealer. It's up to you how the car is placed in service, and if you chose to have your car "in service, shipped across the country, that's up to you." I've checked with two accountants, just to be sure. I'm taking delivery on the 24th'ish, so I'm good either way.

It sounds like you and I are in the same boat. I'm taking advantage of Obama's 2009 Bonus Depreciation for 2009/2010 SUVs with GVWR 6000 and over. A $58k deduction is hard to pass up, couple that with the IRS $900 eco-credit, and the sales tax deduction, and it ends up being around $65,000 in deductions. At my business's tax rate of 56%, it's too good of a deal to pass up.

Take 100% depreciation the first year, finance the vehicle, then deduct the payment interest each year + miles! It's an incredible system way to get an awesome SUV and to have your payments made for the first 4-years (in my case), at which point I'll trade it in.

Check with your own accountant, but I've done pretty extensive research on this particular issue. Good luck!

I agree...it's dependent on the invoice or order date. As long as there's any paperwork that has the order with a 2009 date, then you're good.

[bracoX5d]

Thank you all for quick replies. My CA is expectig the car to arrive by the 28th, so hopefully it won't be an issue, but if it is I think I'll go ahead and contract on the 31st, tax deductions are too good to pass up. I do trust my CA but I'll have him give me somethig in writing that gurantees the color combo and options are what I ordered, although I think everything is correct since even the BMW tracking site shows the correct configuration as does my purchase order. My biggest fear is that there will be damage that I will find unacceptable. Has anyone walked away from a deal at delivery due to damage?

ABMW,

Do you know when your car left the factory, we are both in the bay area so I am curiouse what kind of transport time you are looking at? My completed on 12/4, and was shipped on 12/10.

[BMW_F1]

BracoX5d-

Our 2010 X5 xDrive48i finished production on 12/10 and left the same day for the VPC so apparently we have 2 people one with 35d and one with a 48i heading to the Bay Area on the same date. What is even more un-canny is that our car is space gray with beige, premium, tech, and rear climate.

-BMW_F1

[bracoX5d]

Originally Posted by BMW_F1

BracoX5d-

Our 2010 X5 xDrive48i finished production on 12/10 and left the same day for the VPC so apparently we have 2 people one with 35d and one with a 48i heading to the Bay Area on the same date. What is even more un-canny is that our car is space gray with beige, premium, tech, and rear climate.

-BMW_F1

If my CA tries to give me a 4.8i I'll know whose car it really is

[X5sapphireblack]

I'm also in the Bay Area and my 35d completed production on 12/4 and was sent to the carrier for transport on 12/5. My CA estimates the car to arrive at the dealership the first week of January. I'm also hoping it'll be before year end to take advantage of the sales tax deduction.

[ABMW]

Braco,

I'm picking mine up from a local BMW dealer outside of San Francisco. I don't know when mine left, but they have the VIN# and I have a guarantee from the manager that it will be here. They put my name on one on the lot, in case it doesn't get here in time. In short, they're holding 2-vehicles for me. Of course I put some cash down.

They're aware of the tax situation. As of 7-days ago it was still in South Carolina about to be loaded and shipped here. I was told it would probably show up on the 23rd or 24th.

In short: 20-days to ship. They did tell me that there was some sort of priority program they were able to utilize. I don't know if that was a line or not, but I'm not worried. As long as I have the VIN number, I'm satisfied, and it's on my "hold-receipt." For me this is a business purchase. I'm concerned about two things: the depreciation via a 172 deduction and the sales tax deduction. I'm self-employed, and unfortunately my wife also works full time, so we're getting hammered in taxes. This was the easiest way to eliminate a large chunk of the painful April check we'll have to write. The best part about the whole thing is that we've needed a car for an entire year. I use my vehicle for business for a good 95% of the mileage I put on it (legitimately, if you can believe it).

We sold our cars to move to the Bay Area, bought a (gag, cough, choke) piece of junk Honda Civic, and I've been in automotive hell for 12-months now. So, not only does the purchase keep more money in our pocket, but we finally get a decent car again.

I suppose I'll complete the purchase contract this week, at some point.

X5Sapphireblack: you SHOULD sign your purchase contract prior to the end of the year to take advantage of the sales tax deduction. Why wait?

EVERYONE ABOVE:

KEEP IN MIND THE FOLLOWING- even if you've singed your purchase contract, you still must take delivery for your purchase contract to be completed. If your sign the contract and your car arrives damaged, you need not take delivery. There is a ton of case law surrounding this.

If your car were to arrive damaged you may void your purchase contract. Of course, if this is a business tax purchase, it's best just to have your BMW repaired, once you perform the numbers, but there's not requirement to take delivery of your BMW if it requires a new body panel, etc. Your dealer, if he/she is ethical will tell you the same thing, if they have the slightest bit of legal knowledge (most do, as part of their salesmanship training).

I'm sure there are some attorneys floating around this board who will concur, so that's the least of your worries, in my opinion.

You're signing for a new /mint car. If a damaged car arrives, you need not accept it.