Section 179 tax deduction
 

I have been wandering around wondering about what will follow my 2004 4.4i sport X5. I noticed in the sticky for the E70 - http://www.xoutpost.com/x5-e70-forum/...l-pricing.html - several saying that the rules for the Section 179 tax deduction have radically changed.

Can someone help me with this? Does this go back to my 2004 X5 or just those purchased this year? Or even if it goes back to the 2004, is 2007 the first year the changed are to be implemented or is it later?

I ask because this was a major benefit to me in getting the X5. But if I am cut free from that tax return, then the world looks different. One post says there are other ways to go at this, but gives no leads.

how does buying an extra set of wheels figure into a section 179 tax deduction? anybody know? tia

The vehicle has to be more than 6,000 lbs to qualify for the extra $25K 179 deduction. This was not always the case.

my basic understanding is that section 179 is around 107k this year, with about a 3% increase or cost of living inflation for the next couple years before (at least on paper) its supposed to jump back down to 25k or so. I say at least on paper because I have heard it will get extended.

Check out the IRS website and read the applicable publication for depreciation and 179 deduction - Pub 946. The real catch is the vehicle must weigh over 6000 to take max deduction (and it must be used for business purposes - if it is also used for personal use, then business use must be over 50% and the deduction limited to that percentage). On the door plate of my 04 X5 (sport, premium, 4.4) it says that mine weighs 6005 lbs. My advice (not an accountant) spend the $$'s to see a CPA to figure out the max deduction if you placed your vehicle in "service" during the tax year you are considering for this deduction.

BTW all the 179 does is accelerate you depreciation, so in the later years you have less depreciation to spread against your income. Just another consideration.

Good luck