NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

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Thread: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

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    NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    The Wall Street Journal; 05/14/2011



    Article Quote:

    • Depreciation deductions. In theory, this is an annual write-off that adds up to an asset's cost over its useful life. In practice, lawmakers often speed up depreciation to juice certain activities—like car buying—in ways that make big differences.

    The bottom line: This year Congress is running a large "bonus depreciation" special on cars weighing more than 6,000 pounds, such as the Cadillac Escalade and Nissan Armada. Taxpayers may deduct 100% of the car's cost in the first year—subject to the personal use disallowance, of course.

    Even better: If this deduction creates a loss, it may be used against other wages or carried back to generate a refund. BMW, General Motors, Ford, Jeep, Mercedes Benz, Porsche, Honda, Nissan, Toyota and Volkswagen all have vehicles qualifying for this break.

    Depreciation is far less generous for cars weighing less than 6,000 pounds. Cars costing more than $15,300 get first-year depreciation of $11,060 this year, but those costing more than $30,625 get more in years two through six than those costing less.

    Take, for example, two cars bought in December 2010 for business use, one costing $20,000 and one costing $31,000. Each gets $11,060 of depreciation for 2010, but the more expensive one gets a $4,900 deduction for 2011, while the $20,000 car gets only $3,200, says one expert.

    "Congress is clearly biased against smaller cars," says Joe Kristan, a CPA with Roth & Co. in Des Moines.

    Complete article at link.

    ---------------------------------------

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  3. #2
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    Re: NO JOKE: IRS Says You Can Write Off 100% Of Large SUV Purchase This Year

    Only in America does the government push for 62 MPG in public and pull for 12 MPG in private.

    Note: Before you go running to your local Porche dealer for that new Cayenne Turbo, a ten minute chat with your accountant regarding tax deduction qualification(s) may be in order.

    .

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    Re: NO JOKE: IRS Says You Can Write Off 100% Of Large SUV Purchase This Year

    I think the keyword there is "subject to the personal use disallowance, of course."
    . So unless you have a small business, you are SOL.

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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    Dang I wish they had this in Canada. Sweet deal.

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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    Seems like they're saying you'd be not too smart to lease.

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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    This has to do with small businesses getting a little relief and trying to get them to stimulate the economy. Blue collar workers, young and old, were the ones most affected by the recession and it would make most sense to help them, rather than house them in prisons or give them unemployment, food stamps, and other government monies. Unfortunately, I think the government does not distinguish between an Express van and a Landcruiser, so we help everyone, because this is not a Socialist closed market.
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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    helps sell the big SUVs where the companies make the most profit and can pay more income tax to the govt. follow the money when it comes to tax laws.
    chevy owner since 1953,30 new chevys and 11 new corvettes since 1959 ,# 11 2008 corvette in the garage ,2004 impala,1988 2500 silverado,former NASCAR tech inspector,retired race engine builder. 2008 corvette sold waiting for the C-7. old 88 silverado gone and replaced with a new 2013 ext cab silverado.

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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    Proof that the very complicated U.S. tax code that grows more complex daily needs to be simplified: one much lower rate for corporations (23-25%? from the current 35%?) minus the myriad deductions that together from what I can tell most executives support. This would be combined with a similarly uncomplicated tax code for individuals, again, free of deductions but with much lower rates.

    In this case, there would be no tax breaks for large oil companies, there would be no incentives for electric vehicle purchases, and there would be no incentives for purchasing large SUV's. In that way, oil's price, and therefore gasoline's price, would adjust accordingly, and individuals and small and large businesses would spend the money they earn after taxes on the vehicle that best meets their overall needs. The market will determine the price of oil, and the market will determine which vehicles succeed and fail.

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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    Quote Originally Posted by GM-Joe View Post
    This has to do with small businesses getting a little relief and trying to get them to stimulate the economy. Blue collar workers, young and old, were the ones most affected by the recession and it would make most sense to help them, rather than house them in prisons or give them unemployment, food stamps, and other government monies. Unfortunately, I think the government does not distinguish between an Express van and a Landcruiser, so we help everyone, because this is not a Socialist closed market.
    Ya, and of course everyone is missing the point that if you over deprecate an asset for tax purposes, you get to pay capital gains tax on that asset when you sell it... They are also missing that once you depreciate an asset to Zero... you can't depreciate it any more.

    In the grand scheme of things this is a pay now or pay later kind of thing and really sounds bigger than it is...

    Makes for some really good



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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    Quote Originally Posted by tgagneguam View Post
    Proof that the very complicated U.S. tax code that grows more complex daily needs to be simplified: one much lower rate for corporations (23-25%? from the current 35%?) minus the myriad deductions that together from what I can tell most executives support. This would be combined with a similarly uncomplicated tax code for individuals, again, free of deductions but with much lower rates.

    In this case, there would be no tax breaks for large oil companies, there would be no incentives for electric vehicle purchases, and there would be no incentives for purchasing large SUV's. In that way, oil's price, and therefore gasoline's price, would adjust accordingly, and individuals and small and large businesses would spend the money they earn after taxes on the vehicle that best meets their overall needs. The market will determine the price of oil, and the market will determine which vehicles succeed and fail.
    I was talking about this with a senior IRS executive yesterday, and he said that a simplified tax code is a good idea, but that a drastic change would carry with it the possibility of a revenue shortfall, that the most important part of the tax code is having the revenue to run the government. What happens if you go to a flat tax, then have a 40% revenue shortfall? How does the government get the necessary funds?
    Corporations complain that they have the highest tax rate in the US, but fail to mention that their overall effective taxes PAID is no higher than middle of the pack.
    I think the tax breaks should be for those who buy cars made in America.

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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    Quote Originally Posted by Perian View Post
    The bottom line: This year Congress is running a large "bonus depreciation" special on cars weighing more than 6,000 pounds, such as the Cadillac Escalade and Nissan Armada. Taxpayers may deduct 100% of the car's cost in the first year—subject to the personal use disallowance, of course.
    LOL - what a blatantly leading statement don't use a Silverado as an example, us an Escalade. This is aimed at large work vehicles, and as mentioned, you only qualify if you are a business.

    Don't think many construction/tradesman/delivery/lawn care/etc. are running around in Armada's or Escalades.
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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    ^ Yeah, but you know this will be abused like crazy. The tax code is so screwed up.
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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    Quote Originally Posted by CJH View Post
    LOL - what a blatantly leading statement don't use a Silverado as an example, us an Escalade. This is aimed at large work vehicles, and as mentioned, you only qualify if you are a business.

    Don't think many construction/tradesman/delivery/lawn care/etc. are running around in Armada's or Escalades.
    BUT tradies/lawn care would buy a transit Connect/or ranger but are "pushed" into a Econovan/sprinter IMHO it would have bean simpler to say any "truck" class Vehicle gets the write off

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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    Quote Originally Posted by Masospaghetti View Post
    ^ Yeah, but you know this will be abused like crazy. The tax code is so screwed up.
    So show us a simpler tax code that will raise the same amount of revenue and that will promote business while being fair to the little guy and non-business owners.

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    Re: NO JOKE: IRS Says Companies Can Write Off 100% Of Large SUV Purchase This Year

    Quote Originally Posted by Masospaghetti View Post
    ^ Yeah, but you know this will be abused like crazy. The tax code is so screwed up.
    the tax code is a pay off by the pols for campaign donations
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