TAX PLANNING IDEAS TO CONSIDER WHEN BUYING AN LAND ROVER VEHICLE FOR YOUR BUSINESS

There are some very large tax savings you could receive by purchasing a qualifying Land Rover for your business use. Here is some general information about the program, however you should always consult your tax advisor for your individual situation.
Thanks to the depreciation deductions provided by the Tax Cuts and Job Act of 2017, if a vehicle is going to be used for business in 2024, there are significant tax advantages to consider. In general, for trucks and heavy SUVs purchased after September 27, 2017, and used 100% for business, you have the opportunity use a depreciation deduction in the initial year that the new vehicle is in service. There is also bonus depreciation is set to decrease by year, 60% for 2024, 40% for 2025 and 20% for 2026. In years 2027 and later, bonus depreciation is eliminated.

ADVANTAGES OF BUYING A NEW LAND ROVER SUV

Congress has also kept a generous “section 179” expensing allowance resulting in significant tax deductions for taxpayers who have taxable income, bought a truck or heavy SUV in 2024 and used it 100% for business. Taxpayers that purchased heavy SUVs, receive a “section 179” deduction up to $30,500 in the initial year. The rules that limit the amount of annual depreciation that can be deducted on passenger automobiles do not apply to heavy SUVs because they are considered to be trucks. The definition of heavy is a Gross Vehicle Weight Rating (GVWR) of 6,000 pounds or more. The lineup has six models with a GVWR of 6,000 pounds or more, with the Range Rover, Range Rover Sport, Defender 90, Defender 110, Defender 130 and Discovery all qualifying.
For example, if you purchase a Land Rover SUV in 2024 for $80,000 and plan to use it 100% for business, here is an example of how you can depreciate it. Since it’s a heavy SUV (over 6,000 pounds GVWR) and 100% of its use is for your company business, you can take the limited Section 179 deduction of $30,500 on your 2024 tax return. Additionally, you can claim a first-year bonus depreciation deduction on the remaining cost of $49,500 ($80,000 minus $30,500). For 2024, that’s 60% of the figure, or $29,700 (60% of $49,500). Your total write-off for the Land Rover SUV is $60,200 ($30,500 plus $29,700). Don’t forget these figures are solely for explanatory purposes, you need to consult your tax advisor for how these figures calculate for your individual tax situation.

LAND ROVER NEW SUV INVENTORY

CAN I USE SECTION 179 IF I BUY A USED OR CERTIFIED PRE-OWNED LAND ROVER?

Please note, generally, the “section 179” expense and bonus depreciation can be utilized on new or used qualified vehicles. The addition of used Land Rover vehicles potentially being eligible for bonus depreciation was added under the Tax Cuts and Jobs Act of 2017.

LAND ROVER USED AND CERTIFIED PREOWNED INVENTORY

CONSULTANT YOUR TAX ADVISOR

It is important to remember that the Tax Cuts and Jobs Act of 2017 eliminated the taxpayer favorable treatment of like-kind exchanges under Code Sec. 1031 that was previously allowed. Taxpayers will now have a gain or loss on the traded-in auto, which will be dependent upon the trade-in value and remaining basis of the vehicle. The newly purchased vehicles depreciable cost will simply be its original net cost.
Individual tax situations may vary. The information presented was accurate at time of publishing. Federal rules and tax guidelines are subject to change. Consult your tax advisor for complete details on rules applicable to your business.