Looks like this came up in 2024 but things are more favorable in 2025 and 2025 since the BBB. Previously this deduction was being phased out but now it is stronger than 2024 and before.

Wanted to see if anyone has taken advantage of this and have some additional questions if you have done it.

First my understanding is the following:
* GVWR is over 6,000 pounds
* Use the vehicle at least 50% for business (beyond commuting to regular office)
* Deduction against business, ie sole-proprietor, LLC, S corp, etc (not W2 employee)
* May deduct up to 100% (proportional to amount used for business) in the year it is 'put in service'

If you have done this here are my questions:

1. Does the title have to be held in name of LLC or can it be held by individual?
My current understanding is it can be titled to individual and if it is held by LLC/SC it must be sole-proprietor.

2. Does it have to be paid for in the year you are taking deduction or can it be the following year when it is finally used in this capacity?
My understanding is it can be purchased for example in 2025 and the deduction can start in 2026 assuming you use it in business capacity that year, ie 2026.

3. How long does it have to be used in this capacity before I no longer have to use it for business?
My understanding is 5 years. If it is sold before than or if you use it less than 50% in those 5 years there is a 'clawback' provision to give back money to IRS.

 

I've done this several times including 2024 most recently with my '25 G550. I have my accountant work out the details but I believe it has to be titled in your name, after all it is your tax deduction, has to be deducted the year of the purchase, and I've heard various answers about how long, if I recall my account has told me 3-5 years.

 

No. It needs to be titled in the name of the LLC. You can title it in your personal name, but if you do so, you need evidence of why. One example would be if the interest rate was lower in your name vs a corporate loan.

In terms of the deduction, it has always been there. What the BBB changed was that it brought back 100% bonus depreciation. So instead of depreciating it over 5 years (20% per year), you can take the full deduction in year 1.

The caveat to this is that when you sell it, that income is recaptured. So you buy a new G63 and take a $250k write off... then when you sell it, whether that is 6 months later or 6 years later, what you receive for the sale is treated as taxable income. Most people just buy another one to offset this. So id you trade yours in and get $200k to buy a new one that costs $250k, you have a new $50k write off in that year.

Essentially you are just kicking the can down the road. It only bites you if you decide to sell your G and buy a Toyota Camry. The difference between the two is taxable income.

You don't HAVE to take the full 100% write-off in year 1. Depending on your tax situation, it may make sense to spread it out over a few years.

 

This!

A lot of people read Section179 and FULL write off of the whole car got way too excited and didn't know nor understand the full consequences.

First, when you sold the car, whatever amount you sold is consider a taxable income because it's an asset of your company. For vehicles that retains good value like G, say you paid and write off a $250k G63, a year or two later, you sold for $200k, that year you will be taxed for extra $200k that you sold the car as an income.

And it needs to be titled under your company name. Otherwise, it wouldn't make sense, to write it off from the company income but it's belonging to you, right? Best to look at it is it is your company's asset. That's why you can write it off when purchased (expenses), but will need to report it back when you sold it (income). Yes, you can still write off a personal vehicle for business use, but then it will be more common to write off using the standard milage way instead.

Lastly, as the above stated, everyone's tax situation is different. Writing something off 100% in Year 1 might not necessarily be the best way for your tax too. What if you make more money in the next few years (Year 2 and onwards)? So you are basically take the tax write-off when you are having less income, while paying more tax when you are making more money (thus push you into a higher bracket)? That's why some accountants actually against full 100% write-off (on anything) and prefer spread it out for 5 year. What it will make sense is you suddenly have a major income increase (made a great deal, sales, commission, bonus) this year than you would normally do, it could balance it out with Section179. Plus Section179 could also put you in higher alert from IRS (not necessarily red flagged) as they too know people are abusing it and might be more on the look out for audit.

Talk to you accountant is the best advise IMO.