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You’ve probably seen the buzz online: “Get rich quick” gurus are touting a so-called tax loophole that lets you write off the cost of a luxury vehicle, like a Range Rover or a Mercedes-Benz G-Wagon, on your taxes. It sounds like a dream come true, right? Well, here’s the reality check:
Range rover
| Specification | Details |
|---|---|
| Transmission | 8-speed automatic |
| Drivetrain | All-wheel drive (AWD) |
| 0-60 mph | ~5.4 seconds (P530 V8) |
| Top Speed | ~155 mph (electronically limited) |
| Overall Length | ~207.9 inches |
| Width | ~79.1 inches |
| Height | ~72.5 inches |
| Wheelbase | ~122.8 inches |
| Curb Weight | ~5,200 – 5,700 lbs |
| Seating Capacity | 5-7 passengers |
| Starting Price | ~$110,000 |
Well, those specs are for my gearhead friends. Even though cars might not be your thing, a little information about a beautiful car never hurts. Now, let’s get back to our main topic.
What’s the ‘Range Rover Tax Loophole’?
The hype is all about Section 179 of the IRS tax code, which some social media people claim lets you deduct the full cost of a pricey vehicle if you use it for business. And, technically, they’re not completely off-base. Section 179 does allow businesses to deduct the cost of certain assets, including vehicles, in the year they’re put into service, rather than spreading the deduction out over several years.
But here’s the sad part: This deduction comes with some hefty strings attached. For 2023, the deduction limit for luxury cars is capped at $19,800 and $20,500 for trucks and vans. Plus, the vehicle has to be used for business purposes at least half of the time.
What Does This Mean for You?
Sorry to burst your bubble, but you can’t just walk into a dealership, drive off in a shiny new Range Rover, and expect to write it off as a personal tax deduction. The IRS is crystal clear that this perk doesn’t apply to vehicles used primarily for personal transportation, even if you occasionally use them for business.
So, the “Range Rover tax loophole” isn’t a golden ticket for everyday folks. It’s a legitimate deduction, but it’s meant for small businesses that genuinely need pricey work vehicles, like heavy-duty trucks, not for luxury cars used for joyrides.
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