The X5 and X6 lead the segment with a wide array of features and benefits. One that everyone may not be aware of is a very significant tax deduction that is available when the vehicle is purchased for business use. The IRS categorizes SUVs with a gross vehicle weight in excess of 6,000 lbs differently than other luxury automobiles. As a result:
- Business owners that purchase an X5 or X6 may be eligible for an Immediate Tax Write-Off of up to $25,000 of the Purchase Price.
- Furthermore, an additional Bonus Depreciation Tax Write-Off is also available for such vehicles purchased on or before December 31, 2012.
Here's an example of how the math works:
- X5 Purchase Price: $60,000 with 100% Business Use
- Immediate tax depreciation write-off @ $25,000
- Additional 50% bonus depreciation deduction (($60,000 - $25,000) X 50%) @ $17,500
- 1st year Depreciation Write-Off (($60,000 - $25,000 - $17,500) X 20%) @ $3,500.
- Potential total year depreciation of $25,000 + $17,500 + $3,500 = $46,000
That's a really substantial savings. To qualify, the X5 or X6 must be purchased (not leased) and must be used for at least 50% for business purposes.
Time is of the essence. This is an opportunity to influence business owners to capitalize on this larger tax benefit. To ensure a business owner can take advantage, the X5 or X6 must be placed into service by December 31, 2012.
Now, neither you nor I are accountants. We are in the business of providing vehicle advice not tax advice. Customers with questions regarding this topic should consult their individual tax adviser to determine their eligibility for this deduction.