Anyone using "Hummer / G-Wagon Tax Loophole" to write off their Rivian? [6000 Pound Vehicle Tax Deduction]

[Ash]

I haven't seen this discussed much, so I thought it was worth mentioning. The term "G-Wagon Loophole" is referring to people using this tax code to buy Mercedes G Wagons because they weigh just over 6k lbs. I'm in real estate and bought my R1T to commute about 100 miles a day to work. I purchased my truck through my business for business purposes. Thanks to a change in the tax code a few years back, a business owner can depreciate the entire cost of a vehicle used for business in the first year, if it weighs more than 6k lbs. Yup... I can depreciate the entire cost in the first year which works out nearly half the value of the truck in tax savings. I haven't gotten the exact cost back from my CPA yet, but I'm guessing I'm out about $54k for my truck that came in at $91,588, when it's all said and done. I don't make the rules and I don't break the rules. Please don't hate. Maybe they'll rename it the "R1 Loophole."

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[Dark-Fx]

I thought it was the Hummer loophole.

 

[Firewired]

Thank you for posting this. I have an LLC and had inquired about this when purchasing a Model X in the past from my previous accountant, who did not think I could do it. I just asked this again from my current accountant who I have much more faith in. Waiting for a reply.

 

[Flexia]

It is a loop hole for vehicles that can haul over a certain weight. I did it we a avalanche before. It was meant for farmers technically

 

[Ash]

It is a loop hole for vehicles that can haul over a certain weight. I did it we a avalanche before. It was meant for farmers technically

That sounds familiar. There's probably different rules for heavy equipment though. I remember my forklift didn't qualify as a "vehicle" and so I still had to depreciate it over 5 years or something like that. Maybe it was 50% in the first year, then it tapered off. I'm pretty sure the current tax rule is specifically for "commercial vehicles." What that means until they define it more is open to interpretation. Only reason it's called a loophole is because one can claim any vehicle over 6K lbs used for business is a, "commercial vehicle," even if it's a R1T, Hummer, or G wagon.

 

[rjdoc74]

So much misinformation here. Please read:

https://www.section179.org/section_179_vehicle_deductions/

 

[Sattman69]

So much misinformation here. Please read:

https://www.section179.org/section_179_vehicle_deductions/

YES!

I’ve done this numerous times but when the threshold was much higher. I plan to do it with an R1T but last I looked the current max is $18k. But combined with $7,500 credit it’s $25k. Not bad but snot like it used to be.

 

[Monkey]

I thought it was the Hummer loophole.

It was as it became a popular way to write off expensive, high GVW vehicles. G-Wagon must connect better with millennials or something.

That said I think the R1T should still work for the Section 179 write off. The IRS changed the rules a few years back but I haven’t kept up with the changes.

 

[W1SE]

After reading about this it truly must be a business vehicle owned by the business and used for business. And the value isn’t as high as some may think.

1. The vehicle must be titled to the company not the individual.
2. It must be used for business purposes 50% or more
   1. Commuting to/from home does not count as business usage
   2. You can only deduct the percentage you use it for business.
3. A tax credit is different than a write-off. Simplistically, the depreciation is just taking off how much you earned (which can limittax liability) and not how much you owe.

 

[Arky]

After reading about this it truly must be a business vehicle owned by the business and used for business. And the value isn’t as high as some may think.

1. The vehicle must be titled to the company not the individual.
2. It must be used for business purposes 50% or more
   1. Commuting to/from home does not count as business usage
   2. You can only deduct the percentage you use it for business.
3. A tax credit is different than a write-off. Simplistically, the depreciation is just taking off how much you earned (which can limittax liability) and not how much you owe.

I mean if you just lie about the usage you can claim it and they'll probably never know which is what I imagine a lot of the section 179 claimants are doing.

Purchasing stuff for your 'business' and then using it for all your personal needs is not how this is supposed to work, and would definitely land you in hot water if you're audited, but most people just don't get audited (heck look at all the youtubers that write off an entire car lease because they made one or two videos about it.) Can't wait to see them crack down on it frankly, I'm tired of paying my taxes like a sucker and watching this happen.

 

[W1SE]

I mean if you just lie about the usage you can claim it and they'll probably never know which is what I imagine a lot of the section 179 claimants are doing.

Purchasing stuff for your 'business' and then using it for all your personal needs is not how this is supposed to work, and would definitely land you in hot water if you're audited, but most people just don't get audited (heck look at all the youtubers that write off an entire car lease because they made one or two videos about it.) Can't wait to see them crack down on it frankly, I'm tired of paying my taxes like a sucker and watching this happen.

Yeah, I am not much for tax evasion myself either. Lol. They just increased IRS staff significantly and I don’t want to mess around.

 

[the long way downunder]

Looks like an easy red flag for the IRS/state to desk audit anyone making this sort of claim on a heavy EV with no other apparent business deductions.
It's not a loophole once it's called a loophole. : )

 

[Firewired]

I am not an accountant and would not make the move unless my own approves it. Lying about it seems like such a risky move. From what I understand, the deduction seems pretty generous and reasonable, allowing you to claim it if you only use the vehicle for 51% business. Still waiting to get a yea or nay from my own accountant if they feel would be legit for me.

 

[Alchemy8279]

You can do this with ANY vehicle through the end of 2022. It has been this way for a few years. S179 Bonus depreciation added in law during Obama administration.

 

[Firewired]

I think there are differences if the vehicle weighs more than 6,000 pounds if I am not wrong.

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