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Discussion Starter #1
Anybody else seen this article???

http://www.komotv.com/stories/22303.htm

January 6, 2003

By KOMO Staff & News Services


NEW YORK - You see SUV's on the road everywhere these days, but sport utility vehicles are some of the least efficient and most expensive vehicles out there-- unless you get an unusual tax break that will save you plenty.

Karl Wizinsky just bought a giant Ford Excursion, even though he says he doesn't really need it.

"You certainly get a good view of the road," he says.

But he admits that he bought it because of the big break he can get on his tax return.

"I was surprised that a $32,000 credit on a $47,000 purchase was available in the first year -- I mean, it's a substantial credit," he said.

He was able to write off the majority of this huge SUV because of what critics call an even bigger loophole in the tax code. Tax accountant James Jenkins steers many of his clients to the car lot.

"This morning, I had a client in who had no intention of buying a vehicle prior to the end of the year, and he left here heading to the car dealership," Jenkins said.

At a time when the nation's priorities are to improve gas mileage and reduce dependence on foreign oil, the government has instead provided an incentive for just the opposite -- the biggest, least efficient SUVS available.

Here's how:

The incentives were designed to give tax breaks to small business owners buying trucks for construction or farming. But the tax code was amended before the very largest class of SUVs -- those over 6,000 pounds, existed. The SUV's carry the classification "light truck" even though they are used almost exclusively as passenger vehicles.

As a result, people whose business involves hauling nothing more than themselves reap huge benefits buying Land Rovers, Cadillacs -- even Hummers.

A new Land Rover, for example, with a sticker price of nearly $72,000 will cost only $50,000 after the tax break -- a savings of more than $21,000.

"I don't think the intent of the law was large luxurious SUV's," Jenkins said. "But that's been exactly what's happened."

Critics estimate the loophole is costing the government more than $800 million a year, while putting more and more people into SUV's they otherwise never would have bought.
 

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Wow~~~~

Is MDX in this category as well??? :rolleyes:
 

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Dont' think so....MDX gross vehicle rating is less than 6,000 pounds.

The $32,000 mentioned in the article isn't exactly a "credit", but a depreciation deduction. The article also assumes you're using the vehicle 100% for business purposes, which isn't realistic for most of us. It also fails to consider that you would have to recapture the depreciation as ordinary income if you sold it at a gain. So in theory, that $22,000 tax savings could be substantially less, depending on your tax bracket in the year of sale.

It can be a good deal for some; as always, consult your tax advisor

:D
 

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I believe this is all old news to most people. Many a consumer are aware of the "let me put my car under by personal business name" savings from taxes.

Too bad for the rest of us that don't have a business, legit or not! :(
 

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ndahbar said:
Too bad for the rest of us that don't have a business, legit or not! :(
It only takes $65 bucks to have a business on paper.
 
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