IMO, I would've done this:

Purchase Price of vehicle: $209k
Trade in Allowance: $6k
Taxable Amount less tax credit: $155k
Total Tax in CA: $11,238
Amount Down: $10,000
Total Amount Financed 72 months @ 2.99%: $204k
Monthly Payment: $3100
Total Interest Paid over life of loan: $19k

You can depreciate the G63 due to its weight class entirely the first year. So basically your entire purchase price can be deducted if the vehicle is utilized for your business etc. AMGs in general DO NOT lease well. The way I look at it you're paying $3500 / month for 5 years and STILL OWE $79k to buy it out. With the above illustration your vehicle is paid off in full after 6 years and your title is in hand. See attached link to car payment calculator (just note I inputted a lower tax rate percentage to keep the total applicable tax as close to the true # as possible).

 

With rates below 3% you are almost always better off financing a G.
I got 1.79% 60 months 15% down last week.
Interests are ticking up but bargains are still out there if you shop around for a good rate.

 

Which bank if you don't mind me asking.

 

I used BofA but I’m sure you can find comparable rates if you shop it around.

 

Right now lease rates are crazy high, buying is the better choice IMO. Then again AMG lease rates were always high.

 

With cash earning 0.5% per year in a bank account (that's a taxable $5,000 interest earned on a million dollar deposit) and with the Fed determined to make a million bucks worth 10% less a year from now, buy anything that will hold its value better than the dollar.

 

Checking back as I'm in the same boat, deciding to purchase or lease. I'm leaning towards a purchase with $150k down, financing the remaining $100k with a credit union. Doing this option I would take the full 179 deduction next year. This IMO gives the best option with a remaining low monthly payment. I was always leaning lease but don't like to carry a high monthly payment. May I ask, what did you end up doing and was it a good choice?.....would you do the same today or change?

 

I just returned my 2020 lease last week and walked away with a 55k check due to residuals

 

Nice!...just got off the phone with my accountant and now decided to go with a lease as well! I plan to drive it for at least 3 years.

 

What type of business and what type of proof do you need to take the section 179 deduction? Do you have to prove that the vehicle is used for a work purpose such as hauling farm equipment and such?

 

You could technically have "any type" of business entity, LLC, S-Corp, C-Corp, etc....just needs to be seen as "ordinary and necessary" by the IRS (if audited), and that's subjective.

 

If audited is key here. If you’re never audited then you can claim it with any type of business but if you are audited simply setting up an LLC isn’t going to pass the sniff test and then you will be paying back taxes, fines, and interest. Granted it’s pretty rare for a legit small business to be audited but it’s a gamble nonetheless. Of course this doesn’t apply to companies that use a G for a legitimate business purpose.