Blameitontherain --
This is one case where a Google search is more effective than a site
search using the IRS site alone, as the Google search using the
following terms turns up several articles on this rapidly-changing
topic:
"depreciation" + "gross vehicle weight"
By contrast, using the IRS site -- which is generally excellent --
doesn't get to the core of the definitions needed to answer your
question completely. That said, once you know what you're looking for
the IRS site can be very helpful.
These depreciation rules have been become increasingly liberal in
interpretation and via regulations, with two major moves this year.
First, you should be aware that 2003 depreciation rules were changed
in early October, 20003 by IRS Rev. Proc. 2003-75. Below is a summary
of the rules changes from an accounting software vendor, PPC. The
article is particularly helpful in summarizing definitions and
identifying where in the IRS code to find more detailed definitions.
The impact of this rule change is to allow substantial acceleration of
depreciation for passenger vehicles:
PPCNet.com
"IRS Finally Issues 2003 Depreciation Limits for Luxury Cars" (October, 2003)
http://www.irs.gov/pub/irs-drop/rp-03-75.pdf
The new IRS directive on depreciation rules is here, though it
contains little on the definition of vehicles and gross vehicle
weights:
Internal Revenue Service
"Rev. Proc. 2003-75" (Oct. 21, 2003)
http://www.irs.gov/pub/irs-drop/rp-03-75.pdf
VEHICLE QUALIFICATIONS
-------------------------
The vehicle rules are really at the core of your question and
unfortunately at the core of confusion: there are two sets of vehicle
definitions -- one for depreciation/amortization and a SEPARATE set
for excise taxes. I won't drag you into the excise tax rules -- just
be careful that in looking at IRS rules you aren't mistaking the rules
in Publication 510 ("Excise Taxes for 2003") for the Publication 946
rules.
As the PPC article above points out, passenger autos are four-wheel
vehicles with an UNLOADED gross weight of 6,000 pounds or less.
Trucks or vans -- or any vehicle built on a truck/van chassis,
including many SUVs and minivans -- pass the 6,000-pound test based on
their LOADED weight. The relevant IRS sections are here copied here
in double quotes:
---------------
IRS Sec. 280F(d)(5)(A)
"Passenger Automobile. --
(A) In general. -- Except as provided in subparagraph (B), the term
'passenger automobile' means any 4-wheeled vehicle --
(i) which is manufactured primarily for use on public streets, roads
and highways, and
(ii) which is rated at 6,000 pounds unloaded gross vehicle weight or less.
In the case of a truck or van, clause (II) shall be applied by
substituting 'gross vehicle weight' for 'unloaded gross vehicle
weight.'"
-----------------
The "subparagraph (B)" section applies to trucks, vans, ambulances and
trade vehicles. It has been liberalized this year to specifically
include SUVs and minivans by Prop. Reg. 28.4001-1(b)(2)(iii) was in
fact enabled with an effective date of July 7, 2003, ensuring that
SUVs and minivans are included in the definition of a truck/van (as
long as they are built on a truck chassis):
IRS
"Depreciation of Vans and Trucks (Temporary Regulations)" (July 7, 2003)
http://www.irs.gov/pub/irs-regs/td9069.pdf
Finally, in telephone discussions with IRS agents, they said
businesses should be guided by the instructions in Publication 946.
There are two ways in which an auto can qualify:
? a gross vehicle weight in excess of 6,000 pounds at sale.
? attached components which increase the weight to over 6,000 pounds,
such as a snowplow.
You probably already have Publication 946 as a reference, but it's
available online here:
IRS
"How to Depreciate Property for 2002 Returns"
Publication 946 (page 48)
http://www.irs.gov/pub/irs-pdf/p946.pdf
If you use a Google search involving "Prop. Reg. 28.4001" you'll find
several tax advisors with notes on the impact of the change. (TIP:
when Google pulls up the links, use the "Cached" link -- it will
highlight the relevant phrase in yellow and make it easier to find.)
Google search strategy:
"gross vehicle weight"
"Rev. Proc. 2003-75"
And this also involved a library search for IRS Sec. 280F to make sure
that we had the definitions for you.
We can't interpret tax laws for you but if any part of this is
unclear, we can try to clarify what's been published.
Best regards,
Omnivorous-GA |
