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- Andy
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There are several threads that reference the IRS’s “6,000 lb vehicle” tax deduction, but none seem to answer the questions about it, so I thought I’d put together some info and then see if there are any Bronco6g CPAs or tax attorneys out there who have thoughts from a professional perspective. The key questions I think are: (1) what is the official weight that the IRS uses, and (2) is it possible to add options (such as the Sasquatch Package, or a winch) to push the vehicle weight up over the 6,000-lb threshold.
TL;DR: the IRS’s tax deduction for 6,000-lb SUVs is confusing to apply, and there appears to be some support that a Bronco with a GVWR just under 6,000 lbs could qualify for the tax deduction by adding some options to get it up over the threshold.
Details for those of you who are considering the tax deduction issue:
IRS Tax Section 179 establishes a tax deduction for business owners whose vehicle they deem a work truck, so long as it is used for at least 50% business. But there is ALSO a deduction for UNDER 6,000-lb vehicles, though it is not as generous. Some back of the envelope calculations are that a $50k Bronco that is *over* 6,000 lbs could earn about a $10k deduction, while an *under* 6,000-lb Bronco would earn about a $4,300 deduction.
The first uncertainty is: what is the official weight that the IRS refers to when it determines eligibility? Is it the GVWR, the GAWR, the GCWR, the “base curb weight”, “gross vehicle weight,” “unloaded gross vehicle weight,” “loaded gross vehicle weight”?
The second uncertainty is: which of the following does a Bronco qualify as under the IRS rule: “vehicle,” “car,” “truck,” “van,” and/or “SUV”? This is relevant because the IRS seems to use different types of vehicle weights depending on whether the vehicle is a “car,” “truck,” “van,” or “passenger automobile.”
Here’s what the IRS says, in very unclear terms, particularly its use of the undefined terms “loaded” and “unloaded”:
The third uncertainty is: what is a “loaded” gross vehicle weight, and could a buyer add options to an under-6k-lb SUV in order to get the deduction? Some online suggest that it is the GVWR, and that it is found on the sticker on the inside of the driver door. But that, to me, suggests it is the “unloaded” weight, and not the “loaded” weight that is key for SUVs.
Example: A 2022 two-door manual transmission Bronco Badlands has a “base curb weight” of 4,699 lbs. and a GVWR of 5,720 lbs, according to the spec sheet. But that spec sheet does not factor in any options. Per Bronco6g user “Broncosor” (https://www.bronco6g.com/forum/thre...e-sas-weight-v6-weight-package-weights.11058/), the mid package adds 118 pounds and the Sasquatch adds 188 pounds. In short, that’s 6,026 pounds. I briefly captured a Sasquatch in the wild and found it had a sticker noting the GVWR was 5,720 lbs, meaning that the Sasquatch package did not factor in to the GVWR calculation.
My very unlearned position is that a two-door Badlands with lux package and Sasquatch does indeed meet the 6,000-lb threshold because (1) “loaded” must mean that it includes options such as Sasquatch, and (2) the IRS’s definition of “car” to include “physically attached” “items” “usually included in the purchase price” for “unloaded” must mean that, at the very least, “loaded” would include these items, too (Sasquatch; lux package), and (3) the CPA websites that note that “loaded” includes “options” would include Sasquatch and Lux Package.
Any CPAs or tax attorneys out there want to chime in to agree or disagree?
I’m not a CPA or a tax attorney, so don’t rely on me for any tax advice.
TL;DR: the IRS’s tax deduction for 6,000-lb SUVs is confusing to apply, and there appears to be some support that a Bronco with a GVWR just under 6,000 lbs could qualify for the tax deduction by adding some options to get it up over the threshold.
Details for those of you who are considering the tax deduction issue:
IRS Tax Section 179 establishes a tax deduction for business owners whose vehicle they deem a work truck, so long as it is used for at least 50% business. But there is ALSO a deduction for UNDER 6,000-lb vehicles, though it is not as generous. Some back of the envelope calculations are that a $50k Bronco that is *over* 6,000 lbs could earn about a $10k deduction, while an *under* 6,000-lb Bronco would earn about a $4,300 deduction.
The first uncertainty is: what is the official weight that the IRS refers to when it determines eligibility? Is it the GVWR, the GAWR, the GCWR, the “base curb weight”, “gross vehicle weight,” “unloaded gross vehicle weight,” “loaded gross vehicle weight”?
The second uncertainty is: which of the following does a Bronco qualify as under the IRS rule: “vehicle,” “car,” “truck,” “van,” and/or “SUV”? This is relevant because the IRS seems to use different types of vehicle weights depending on whether the vehicle is a “car,” “truck,” “van,” or “passenger automobile.”
Here’s what the IRS says, in very unclear terms, particularly its use of the undefined terms “loaded” and “unloaded”:
- IRS Publication 463 (https://www.irs.gov/publications/p463) states that for cars UNDER 6k lbs, the 6k is considered “unloaded gross vehicle weight”, except that it distinguishes for “trucks” and “vans” as just “gross vehicle weight” (i.e., it does not say “unloaded”).
- “A car is any four-wheeled vehicle (including a truck or van) made primarily for use on public streets, roads, and highways. Its unloaded gross vehicle weight (for trucks and vans, gross vehicle weight) must not be more than 6,000 pounds. A car includes any part, component, or other item physically attached to it or usually included in the purchase price.”
- “Limit for sport utility and certain other vehicles. You cannot elect to deduct more than $27,000 of the cost of any heavy sport utility vehicle (SUV) and certain other vehicles placed in service during the tax years beginning in 2022. This rule applies to any four-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways that isn’t subject to any of the passenger automobile limits explained under Depreciation Limits, later, and that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds gross vehicle weight.”
- IRS Publication 946(https://www.irs.gov/publications/p946)
- “A passenger automobile is any four-wheeled vehicle made primarily for use on public streets, roads, and high-ways and rated at 6,000 pounds or less of unloaded gross vehicle weight (6,000 pounds or less of gross vehicle weight for trucks and vans). It includes any part, component, or other item physically attached to the automobile at the time of purchase.”
- “You cannot elect to expense more than $27,000 of the cost of any heavy sport utility vehicle (SUV) and certain other vehicles placed in service in tax years beginning in 2022. This rule applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, or highways that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds gross vehicle weight.”
- The publication also notes that the “over 14,000 pounds” threshold is for “loaded gross vehicle weight”
- A CPA firm states that (https://www.crabtreecpa.com/938.php) “Passenger vehicles with a Unloaded Gross Vehicle Weight of over 6,000 pounds, and trucks and vans, including SUVs, with a Loaded Gross Vehicle Weight greater than 6,000 pounds”. The same website says that for “passenger vehicles, “the Unloaded Gross Vehicle Weight is the vehicle’s curb weight,” but for trucks, vans, and SUVs, the “Loaded Gross Vehicle Weight Rating (GVWR) is the maximum allowable weight of a fully loaded vehicle, including the weight of the vehicle, options, passengers, cargo, gas, oil, etc. Typically, the GVWR is equal to the sum of the vehicle's curb weight and payload capacity. The GVWR is usually located on the vehicle's Safety Compliance Certification Label, which is attached to the left front door lock facing or the door latch post pillar.”
- Two tax companies apparently have IRS letters that note that “The term ‘truck or van’ includes vehicles that are commonly known as sport utility vehicles.” (https://www.taxnotes.com/research/f...ty-vehicle-is-not-subject-to-luxury-tax/1j6rg; https://www.bradfordtaxinstitute.com/Endnotes/PLR_9520034.pdf). They also note that the under-6k lbs definition is for “unloaded” GVW but that “for trucks and vans, substituting ‘gross vehicle weight’ for ‘unloaded gross vehicle weight’,” which implies the distinction that vans and trucks (like SUVs/Broncos) are weighed as “loaded.”
- Other CPA firms state that SUVs use a “loaded” gross vehicle weight (https://www.klcpas.com/drive-more-savings-to-your-business-with-the-heavy-suv-tax-break/; https://www.accountingfreedom.com/heavy-suv-tax-deduction/).
The third uncertainty is: what is a “loaded” gross vehicle weight, and could a buyer add options to an under-6k-lb SUV in order to get the deduction? Some online suggest that it is the GVWR, and that it is found on the sticker on the inside of the driver door. But that, to me, suggests it is the “unloaded” weight, and not the “loaded” weight that is key for SUVs.
Example: A 2022 two-door manual transmission Bronco Badlands has a “base curb weight” of 4,699 lbs. and a GVWR of 5,720 lbs, according to the spec sheet. But that spec sheet does not factor in any options. Per Bronco6g user “Broncosor” (https://www.bronco6g.com/forum/thre...e-sas-weight-v6-weight-package-weights.11058/), the mid package adds 118 pounds and the Sasquatch adds 188 pounds. In short, that’s 6,026 pounds. I briefly captured a Sasquatch in the wild and found it had a sticker noting the GVWR was 5,720 lbs, meaning that the Sasquatch package did not factor in to the GVWR calculation.
My very unlearned position is that a two-door Badlands with lux package and Sasquatch does indeed meet the 6,000-lb threshold because (1) “loaded” must mean that it includes options such as Sasquatch, and (2) the IRS’s definition of “car” to include “physically attached” “items” “usually included in the purchase price” for “unloaded” must mean that, at the very least, “loaded” would include these items, too (Sasquatch; lux package), and (3) the CPA websites that note that “loaded” includes “options” would include Sasquatch and Lux Package.
Any CPAs or tax attorneys out there want to chime in to agree or disagree?
I’m not a CPA or a tax attorney, so don’t rely on me for any tax advice.
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