Tax Guru – Ker$tetter Letter

Helping real people win the tax game.

Documenting vehicle weight…

Posted by taxguru on April 23, 2008

Q:

Subject: Section 179 & Toyota Highlanda Hybrid, GVWR 6150 lbs

Tax Guru,

I’ve come across an interesting situation. The 2008 Toyota Highlander Hybrid has a sticker/plate inside the drivers side door that states the GVWR as 6150 lbs. However, all the marketing brochures and even Toyota’s web site lists the GVWR as 6000lbs. We’re thinking of buying this SUV for our small business and want to understand if it qualifies under Section 179.
The plate on the SUV would seem to indicate it does but all other posted information seems to indicate it doesn’t.

Any advice?

Thanks.

A:

You really need to be discussing this with your own personal professional tax advisor. However, I am willing to explain how I would address this if it were with one of my clients.

I am guessing that the discrepancy in the listed weights may have something to do with some optional equipment that was installed on the vehicle with that ID plate. The promotional literature from Toyota most likely deals with the standard vehicle before the addition of any optional equipment.

I’ve mentioned on several occasions how some auto dealers actually offer “tax deductibility” add-on packages of options that take an under 6,000 vehicle into the over 6,000 pound qualifying area. This is why feeling limited to the weights shown on promotional literature is not appropriate.

If, as it seems, you are nervous about IRS possibly disallowing your larger Section 179 deduction for a vehicle over 6,000 pounds, I would go the extra mile in documenting the legitimacy up front. As I’ve mentioned on numerous occasions, one of the main reasons I am opposed to electronic tax returns is the inability to include additional documentation of potentially questionable items. This is a perfect example.

In your case here, I would take a photograph of the ID plate indicating the GVW of 6,150 pounds and attach it to the tax return where you are claiming that Section 179 deduction. I can’t imagine any IRS auditor wanting to quibble over that being wrong. If anything, you may be questioned about your business usage of the SUV; but I can’t see the weight being an issue of contention if you have that photo attached.

Again, you should run this by your own professional tax advisor.

Good luck.

Kerry Kerstetter

TaxCoach Software: Are you giving your clients what they really want?

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