100% Deduction of New Heavy SUV


The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, created a 100% bonus depreciation deduction for new property acquired after September 8, 2010.  This 100% deduction was extended to qualified property placed in service before 2013.

The impact of this new tax provision is that taxpayers can deduct 100% of the cost of a new vehicle.  However if the Gross Vehicle Weight is less than 6,000 pounds the deduction is limited by the luxury automobile limits under Code Section 280F.  This is generally the case for all passenger vehicles and will most likely limit the taxpayers deduction to $11,060 in 2011.

Conversely, if the taxpayer purchases a vehicle with a Gross Vehicle Weight over 6,000 pounds, the luxury automobile limitations do not apply.  The vehicle does not meet the definition of a passenger vehicle  The taxpayer is allowed to deduct 100% of the cost of a new SUV in 2011.

You may pay the price at the pump but you will receive a large tax deduction in 2011.


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