POTENTIAL TAX SAVINGS OPPORTUNITY
Under Section 168(k) of the IRS Tax Code, many businesses that invest in new equipment, including qualifying new vehicles, can potentially deduct a maximum of the entire purchase cost, of one or more business vehicles, on their IRS tax returns. * Qualifying Ford commercial vehicles include Ford Transit, E-Series, F-150, F-250/350/450/550/600 Super Duty®
, F-650/750 Medium Duty and Stripped Chassis. * For more information, visit IRS.gov
and contact your tax professional.
*Under Bonus Depreciation in Section 168(k) of the Internal Revenue Code, companies may be eligible to fully expense the cost of trucks, vans and SUVs rated over 6,000 lbs. GVWR, when purchased for business use. Trucks and vans that are considered passenger vehicles, rated under 6,000 lbs. GVWR, are limited to $18,100 of depreciation in the year of purchase with normal MACRS depreciation on the remaining basis in the vehicle in subsequent years. A vehicle is not considered a passenger vehicle, and is thus not limited to the lower depreciation amounts, if it is considered a “qualified non-personal use vehicle.” Qualified non-personal use vehicles are vehicles that, by virtue of their nature or design, are not likely to be used more than a de minimis amount for personal purposes. Examples of qualified non-personal use vehicles include 1) a vehicle that can seat nine-plus passengers behind the driver’s seat, 2) a heavy non-SUV vehicle with a cargo area of at least six feet in interior length or 3) a vehicle with a fully enclosed driver’s compartment/cargo area, no seating behind the driver’s seat, and no body section protruding more than 30 inches ahead of the leading edge of the windshield. For more information, see IRC Section 280F(d)(7), Income Tax Reg. Sec. 1.280F-6(c) (3)(iii), Income Tax Reg. Sec. 1.274-5T(k), and Revenue Ruling 86-97, and contact your tax advisor for details. Only applies to business vehicle purchases occurring after Dec. 31, 2019, and by Dec. 31, 2020. Consult your tax advisor as to the proper tax treatment of all business-vehicle purchases.