SUV Tax Loophole

<div class='quotetop'>QUOTE(Beryl Octet @ Jan 30 2007, 07:11 AM) [snapback]382771[/snapback]</div>

It is such old news, in fact, that for the past several years the amount has been increased to $100,000. I kid you not. Would make a Hummer about half price for most people who buy them. While a Prius enjoys about a 9% reduction in tax rebates.

Screwed up? You betcha.

 

If I recall it the original credit was created back in the '70s for construction/farm folks. Of course SUVs didn't exist then and certainly nothing that big. 6000 lbs vehicles definitely fit into the work category. However, times changed and the law didn't. Then the law was perverted. It is absolutely obscene as should be erased as soon as possible and replaced with a $200K tax penalty for anyone who wants one.

 

What gets me that there are peole who are outraged when I get a tax credit for putting up solar, for buying an EV and for buying a Prius.

If we have enough money to offer rebates for Hummer purchasers, then we should sure as hell be putting more into EVs and solar!

Let me see if the links from my links page are still valid:
loophole 1
loophole 2
loophole 3

Well, 3 of 4 still work. Need to go edit my page... So read those and get caught up on what's going on.

 

Isn't it just great how the 6000 lb threshold actually encouraged people to buy larger vehicles than they might otherwise have wanted?

I don't know if this is true (too lazy and don't care enough to look it up), but I heard that Toyota moved the Land Cruiser and Lexus LX450 up in GVWR so that they could qualify for the tax break, after seeing how successful it was in increasing Hummer H2 sales. They were actually just under the threshold before their capacities were revised.

EDIT: It couldn't have been the LX450 and Land Cruiser as their GVWRs are way over 6000lbs. It looks like it was the Lexus GX470, since its GVWR is exactly 6000lbs, while the similar Toyota 4Runner doesn't make it (5490lbs). BMW X5 GVWR is 6005lbs, probably not a coincidence that it just breaks the 6000lb threshold.

 

Our Volvo XC90 qualifies for the tax credit, but it doesn't qualify even though it's used quite a lot for business. It's not as simple as buying a big SUV and getting the credit. Wish it were.

 

<div class='quotetop'>QUOTE(DocVijay @ Jan 30 2007, 12:35 PM) [snapback]382960[/snapback]</div>

It's not a tax credit, it's a deduction. There's a big difference between the two.

 

<div class='quotetop'>QUOTE(TonyPSchaefer @ Jan 30 2007, 01:09 PM) [snapback]382853[/snapback]</div>

Yeah, around the Detroit area, I see a lot of hummers. I see many with those magnet company signs so that they can take them off when it's convenient but a lot of the companies are ones that I wouldn't think would need one such as a dry cleaners, a computer hardware outfit and others that could get by fine with a Prius. Didn't they dial back the deduction? One of the first things bush did when he slithered in to the oval offfice was to increase the $25,000 deduction to $100,000 but I thought that it has since been reduced.

 

<div class='quotetop'>QUOTE(tripp @ Jan 30 2007, 11:57 AM) [snapback]382822[/snapback]</div>

HAHAHAHAHAHA

Wanna see small business go under? Put that plan into action.

Look, the whole point of this is to give small businesses a break when purchasing trucks, vans, stuff like that. Short of completely re-writing the tax code to differentiate between types of businesses (and we all know the IRS is so screwed up thats impossible), yes doctors and realtors and going to be able to write off their big SUVs too. Might be "obscene", but its not obscene to help a struggling landscaping or delivery business out with some vehicles.

In fact, my financial planner wants me to trade my Lexus in on a big SUV as a tax shelter...

 

<div class='quotetop'>QUOTE(SW03ES @ Jan 31 2007, 11:40 AM) [snapback]383306[/snapback]</div>

Realtors, yes, as they spend a lot of time driving on the job. But doctor's don't have as easy a time. The drive from home to the hospital (or the office) does NOT count towards the business use. Neither does the drive home from either of those places. Only if you drive between hospitals, or from office to hospital does the use count.

The business use has to be at least 51% of the total miles driven, and your daily commute doesn't count!

One way to get around it is to affix some sort of advertising to it. Then it is considered part of business use any time you are advertising business. This is the only way you can get the drive to and from work to count if it is your personal car. If the sign is magnetic then you can indeed take the signs off when you don't want them there, but technically that driving does not count towards business use. We do have a physician friend who did buy an H2 and got the deduction, but his Hummer is covered from top to bottom with vinyl wrap-around graphics advertising his walk-in clinic.

To properly claim the deduction, you need to keep a fairly accurate log of the miles driven and indicate which miles are business use. If those don't add up to more than 51% of the total miles, then no deduction.

These tax loopholes are not so easy to use if done properly. If you claim it improperly, it's no different than cheating on your taxes any other way, and doesn't deserve such spite. You can't just own a business, buy an H2 and let your spouse drive it all the time and then claim it as a business deduction. That is NOT how it works. Of course people do that, but if they get audited the IRS will want to get paid back taxes for that improper deduction.

We are NOT claiming ours as a deduction, and never will. We don't feel it's worth it to try and cheat the system, because if you do get caught it really sucks.

 

<div class='quotetop'>QUOTE(DocVijay @ Feb 1 2007, 04:25 PM) [snapback]384094[/snapback]</div>

Good points and all true.