Section 179 tax deduction for Cross Turismo?

[MohCT4]

I ordered my CT4 last month, delivery on 7/30. So I happened to look at the spec sheet for the CT and noticed the Gross Vehicle Weight Rating(GVWR) is 6360lbs. Considering this car is being marketed as a CUV, and I’m using it primarily as my daily driver to and from work, I think it qualifies for the “heavy vehicle” 100% first year bonus depreciation. Heavy vehicles are defined as CUVs, SUVs, Trucks and Vans that are over 6000lbs GVWR.

Someone please tell me if I’m wrong here! Because if I’m correct...wow, this car is gonna be phenomenal to drive and the gift that keeps on giving!

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[chrisk]

Shouldn't the car be used primarily for business purposes and be titled under the company's name?

 

[MohCT4]

Shouldn't the car be used primarily for business purposes and be titled under the company's name?

Yes on business purposes, possibly on the title, depends on how you structured your Corp/LLC etc. (consult your tax professional, I plan to call mine tomorrow) ??‍

 

[Dr Chill]

I have used this deduction for my business several times in the past with SUV's or cars with GWVR> 6000 lbs purchased and titled by me personally but used by my business. Used to be 100%, then $25,000. Now I think it's just over $11,000. I may be wrong though.

 

[MohCT4]

After reading some articles on this, it seems that if it can be classified as a truck then you can take either $25,000 deduction in the first year and then depreciate over the course of many years, OR take 100% bonus depreciation in the first year. If it’s not a truck you can take a max of $18,000 in the first year and then take the rest over the course of many years.

The problem is the CT is not a truck by any stretch of the imagination. But, again I’m going to defer to my CPA. If he can work his magic, I’ll be thrilled.

 

[ithinkmac]

Wow. I got 2 Model X under 179, but just never thought about the CT (never even bother to look up GVWR). But now that you mentioned it's >6k lbs, it might qualify. I believe IRS considers heavy cross-overs as qualified vehicles. Anybody heard back from their CPA yet? This will be great, since my CT will be my 100% work vehicle, the fact that it qualifies for 179 will be gravy. Which means I might upgrade to a Turbo instead of 4S.

-ThinkMac-

 

[MohCT4]

Here’s the website I was referencing. They have some pretty clear requirements of what constitutes a truck, this is why I’m skeptical.

https://bradfordtaxinstitute.com/Fr...uction-Crossover-Vehicle-Unibody-Chassis.aspx

Here’s the relevant part:

——-

A. Your crossover vehicle is a truck if you can create a flat, floor-level surface from the front seats to the rear by removing the seats using simple tools such as screwdrivers and wrenches.

OR

B. Your crossover vehicle is a truck if it first has either (a) four-wheel drive or (b) a GVWR of more than 6,000 pounds, and second has four or more of the following five characteristics



1.
Approach angle of not less than 28 degrees

2.
Break-over angle of not less than 14 degrees

3.
Departure angle of not less than 20 degrees

4.
Running clearance of not less than 20 centimeters

5.
Front and rear axle clearances of not less than 18 centimeters

—————————————
Again, this is just my own research. So take it with a grain of salt. I’ll be thrilled if we can get the full section 179 deduction. And if it means calling my Taycan 4 CT a truck, so be it!

 

[ithinkmac]

Based on that technicality, the CT will not qualified as a truck.

Approach angle is like 12.2 inches.

Bummer.

-ThinkMac-

 

[ithinkmac]

Hmm... Re-reading the page.

Plan C applies to crossovers that are subject to the gas-guzzler tax. If the gas-guzzler tax does not apply your crossover vehicle—good news—your crossover is a truck.

Still hopeful. Need to ask some experts.

-ThinkMac-

 

[MohCT4]

Hmm... Re-reading the page.

Plan C applies to crossovers that are subject to the gas-guzzler tax. If the gas-guzzler tax does not apply your crossover vehicle—good news—your crossover is a truck.

Still hopeful. Need to ask some experts.

-ThinkMac-

Same. I am trying to understand plan C. I don’t quite get it. I forwarded that page to my CPA. Hopefully I’ll get an answer this week and can share it here.

 

[Pugs]

Hi MohCT4,

Did you get an answer from your CPA regarding the Taycan 4 Cross Turismo on section 179? Thanks in advance.

 

[MohCT4]

Hi MohCT4,

Did you get an answer from your CPA regarding the Taycan 4 Cross Turismo on section 179? Thanks in advance.

Based on my CPA's opinion, we would have been fine if the CT was classified as a crossover. HOWEVER, after reading this thread:

https://www.taycanforum.com/forum/t...smo-will-be-at-my-dealer-today-in-texas.5586/

One of the members of the forum "Klepper", got his CT delivered in Texas, ran his VIN through a VIN decoder and the vehicle came back as a "Passenger Car". It's essentially a heavy car, not a crossover. So I think we're out of luck on the bonus deduction/depreciation. We can still take the 179 deduction for a passenger vehicle, but we won't get the same benefit as if it was a truck.

Sucks. But honestly, it was kind of a dream.

 

[plamichigan]

I ordered my CT4 last month, delivery on 7/30. So I happened to look at the spec sheet for the CT and noticed the Gross Vehicle Weight Rating(GVWR) is 6360lbs. Considering this car is being marketed as a CUV, and I’m using it primarily as my daily driver to and from work, I think it qualifies for the “heavy vehicle” 100% first year bonus depreciation. Heavy vehicles are defined as CUVs, SUVs, Trucks and Vans that are over 6000lbs GVWR.

Someone please tell me if I’m wrong here! Because if I’m correct...wow, this car is gonna be phenomenal to drive and the gift that keeps on giving!

On "bonus" depreciation, and indeed on any depreciation on a car or truck:

There is a lot of misinformation about this in the press and online. If you have an interest in claiming actual expenses on your vehicle, and you actually use that vehicle regularly for bona fide business usage, then read further:

* Be sure your use qualifies as "business use," and that you are ready to document that business use, including with written records on mileage and purpose of mileage.
* Commuting to work is not "business use." Neither is driving to your cottage up north, or to ballgames where you might meet a buddy of yours that works with you. Porsche meet ups, impromptu road rallies, cars and comedians get coffee, and the like don't count. (Unless you are a professional comedian and that is your gig.)
* These records will have to include all your costs (including depreciation, more on that below), and repairs, and insurance.
* You may only deduct the costs for business use. Do not rely upon any internet posts that suggest you get can deduct more, just because (here's a selection of items I've seen): it weighs more than 6000 lbs; you titled it in the name of your business; you know an accountant that said you could; you know a Mercedes driver that says he does it; etc.

Here is the IRS summary, and a link to their publication:
"If you use your car only for business purposes, you may deduct its entire cost of ownership and operation (subject to limits discussed later). However, if you use the car for both business and personal purposes, you may deduct only the cost of its business use.

You can generally figure the amount of your deductible car expense by using one of two methods: the standard mileage rate method or the actual expense method. If you qualify to use both methods, you may want to figure your deduction both ways before choosing a method to see which one gives you a larger deduction."
https://www.irs.gov/taxtopics/tc510

The only time depreciation enters into your deduction is when you (a) meet all the requirements, and (b) choose the actual expenses method. Then you calculate depreciation (or, rather, you select an allowable depreciation method and use it). Indeed, then and only then, a very heavy vehicle could qualify for higher depreciation. Here is the IRS topic:
https://www.irs.gov/publications/p463#en_US_2020_publink100033951
That is a complicated topic, but for the large majority of people reading this, it will probably not be worth the money to pay a tax accountant to figure this out as well as keep the necessary records. For a handful it will, and I suggest they consult a tax advisor and read the IRS publication above.

PLA

 

[plamichigan]

On "bonus" depreciation, and indeed on any depreciation on a car or truck:

There is a lot of misinformation about this in the press and online. If you have an interest in claiming actual expenses on your vehicle, and you actually use that vehicle regularly for bona fide business usage, then read further:

* Be sure your use qualifies as "business use," and that you are ready to document that business use, including with written records on mileage and purpose of mileage.
* Commuting to work is not "business use." Neither is driving to your cottage up north, or to ballgames where you might meet a buddy of yours that works with you. Porsche meet ups, impromptu road rallies, cars and comedians get coffee, and the like don't count. (Unless you are a professional comedian and that is your gig.)
* These records will have to include all your costs (including depreciation, more on that below), and repairs, and insurance.
* You may only deduct the costs for business use. Do not rely upon any internet posts that suggest you get can deduct more, just because (here's a selection of items I've seen): it weighs more than 6000 lbs; you titled it in the name of your business; you know an accountant that said you could; you know a Mercedes driver that says he does it; etc.

Here is the IRS summary, and a link to their publication:
"If you use your car only for business purposes, you may deduct its entire cost of ownership and operation (subject to limits discussed later). However, if you use the car for both business and personal purposes, you may deduct only the cost of its business use.

You can generally figure the amount of your deductible car expense by using one of two methods: the standard mileage rate method or the actual expense method. If you qualify to use both methods, you may want to figure your deduction both ways before choosing a method to see which one gives you a larger deduction."
https://www.irs.gov/taxtopics/tc510

The only time depreciation enters into your deduction is when you (a) meet all the requirements, and (b) choose the actual expenses method. Then you calculate depreciation (or, rather, you select an allowable depreciation method and use it). Indeed, then and only then, a very heavy vehicle could qualify for higher depreciation. Here is the IRS topic:
https://www.irs.gov/publications/p463#en_US_2020_publink100033951
That is a complicated topic, but for the large majority of people reading this, it will probably not be worth the money to pay a tax accountant to figure this out as well as keep the necessary records. For a handful it will, and I suggest they consult a tax advisor and read the IRS publication above.

PLA

---

More information for the (large majority of) drivers for whom "business use" is less than 50%:


"Qualified business use 50% or less in year placed in service.

"If you use your car 50% or less for qualified business use, the following rules apply.

• You can’t take the section 179 deduction.
• You can’t take the special depreciation allowance
• You must figure depreciation using the straight line method over a 5-year recovery period. You must continue to use the straight line method even if your percentage of business use increases to more than 50% in a later year. "

https://www.irs.gov/publications/p463#en_US_2020_publink100034038

Again, if you want to go this route, be sure you know what you are doing.

PLA

 

[Torv]

I ordered my CT4 last month, delivery on 7/30. So I happened to look at the spec sheet for the CT and noticed the Gross Vehicle Weight Rating(GVWR) is 6360lbs. Considering this car is being marketed as a CUV, and I’m using it primarily as my daily driver to and from work, I think it qualifies for the “heavy vehicle” 100% first year bonus depreciation. Heavy vehicles are defined as CUVs, SUVs, Trucks and Vans that are over 6000lbs GVWR.

Someone please tell me if I’m wrong here! Because if I’m correct...wow, this car is gonna be phenomenal to drive and the gift that keeps on giving!

Declare and see what happens! The only downside is a short, walk in the park, term at Leavenworth.

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