Is Section 179 applicable for SUVs or trucks?

by | Jun 6, 2025 | Business Taxes, Vehicle & Mileage

Here’s what HIVE AI had to say about “Is Section 179 applicable for SUVs or trucks?”:

Yes, Section 179 is applicable to SUVs and trucks, but with important limitations and restrictions that you must understand to properly claim these deductions.

General Applicability to SUVs and Trucks

Section 179 does apply to SUVs and trucks when they qualify as Section 179 property. The Form 1040 that Mr. Ottuso submitted to the Commissioner’s counsel in July 2020 indicates a section 179 election for a “Chevy Silverado 2015” truck in addition to the mower and the tractor. Dawson U.S. Tax Court Opinions: Ralph M. Ottuso This demonstrates that trucks can qualify for Section 179 treatment when properly substantiated.

For property to qualify under Section 179, the property must, among other things, be “acquired by purchase for use in the active conduct of a trade or business.” Dawson U.S. Tax Court Opinions: Stephen Drah This fundamental requirement applies to all vehicles, including SUVs and trucks.

Special Limitations for SUVs

There are specific dollar limitations that apply to SUVs under Section 179. For taxable years beginning in 2023, under § 179(b)(1), the aggregate cost of any § 179 property that a taxpayer elects to treat as an expense cannot exceed $1,160,000 and under § 179(b)(5)(A), the cost of any sport utility vehicle that may be taken into account under § 179 cannot exceed $28,900. Rev. Proc. 2022-38

The current limitation for SUVs is further detailed in IRS publications: You cannot elect to deduct more than $28,900 of the cost of any heavy sport utility vehicle (SUV) and certain other vehicles placed in service during the tax years beginning in 2023. 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 463: Travel, Gift, and Car Expenses

The statutory definition provides that The cost of any sport utility vehicle for any taxable year which may be taken into account under this section shall not exceed $25,000. (B) Sport utility vehicleFor purposes of subparagraph (A)— (i) In generalThe term “sport utility vehicle” means any 4-wheeled vehicle— (I) which is primarily designed or which can be used to carry passengers over public streets, roads, or highways (except any vehicle operated exclusively on a rail or rails), (II) IRC § 179(b) [Note: The current limitation has been increased from the statutory $25,000 to $28,900 for 2023 through inflation adjustments.]

Exceptions to SUV Limitations

Important exceptions exist to the SUV limitations. However, the $28,900 limit doesn’t apply to any vehicle: • Designed to have a seating capacity of more than nine persons behind the driver’s seat; • Equipped with a cargo area of at least 6 feet in interior length that is an open area or is designed for use as an open area but is enclosed by a cap and isn’t readily accessible directly from the passenger compartment; IRS – Publication 463: Travel, Gift, and Car Expenses

Additional exceptions are provided in the instructions: You cannot elect to expense more than $30,500 of the cost of any SUVs and certain other vehicles placed in service during the tax year. 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. However, the $30,500 limit does not apply to any vehicle: IRS – Instruction 4562: Instructions for Form 4562, Depreciation and Amortization (Including Information on Listed Property) [Note: This appears to be from an older version; current limits are $28,900.]

Weight Classifications and Passenger Automobile Limits

The weight of the vehicle is crucial in determining applicable limitations. Except as provided in paragraph (c)(3) of this section, the term passenger automobile means any 4-wheeled vehicle which is: (i) Manufactured primarily for use on public streets, roads, and highways, and (ii) Rated at 6,000 pounds gross vehicle weight or less. Tresuary Reg. 1.280F-6

For vehicles above certain weight thresholds, different rules apply. Based on our discussion, the taxpayer’s ————————–SUV is not a passenger automobile (as defined in section 280F(d)(5)) based on it’s gross vehicle rating of ——–, and therefore is not subject to the depreciation limits under section 280F(a) and Rev. Proc. 2004-20. This weight rating and the manufacturer’s classification as a car, truck, or van are the controlling factors, not the type of chassis. IRS Determination-1138046 IRS Determination-1138046

Trucks vs. Passenger Automobiles

Trucks are treated differently from passenger automobiles for depreciation purposes. maximum depreciation deductions for trucks and vans are generally higher than those for cars. A truck or van is a passenger automobile that is classified by the manufacturer as a truck or van and rated at 6,000 pounds gross vehicle weight or less. IRS – Publication 463: Travel, Gift, and Car Expenses

The regulatory definition distinguishes trucks from tractors: The term “truck” refers to a highway vehicle that is primarily designed to transport its load on the same chassis as the engine even if it is also equipped to tow a vehicle, such as a trailer or semitrailer. Tresuary Reg. 145.4051-1

Business Use Requirements

Regardless of the vehicle type, business use must be properly substantiated. However, Mr. Ottuso has not met the strict substantiation requirements (described in more detail supra pp. 11–13) needed to show that he used the latter truck for business purposes, so we do not allow a section 179 deduction for any of its purported purchase price. Dawson U.S. Tax Court Opinions: Ralph M. Ottuso

For mixed-use vehicles, If a taxpayer uses section 179 property for trade or business as well as other purposes, the portion of the cost of the property attributable to the trade or business use is eligible for expensing under section 179 provided that more than 50 percent of the property’s use in the taxable year is for trade or business purposes. Tresuary Reg. 1.179-1

Qualified Nonpersonal Use Vehicles

Certain trucks and vans may qualify as “qualified nonpersonal use vehicles” which are subject to different substantiation requirements. These are vehicles that by their nature aren’t likely to be used more than a minimal amount for personal purposes. They include trucks and vans that have been specially modified so that they aren’t likely to be used more than a minimal amount for personal purposes, such as by installation of permanent shelving and painting the vehicle to display advertising or the company’s name. Delivery trucks with seating only for the driver, or only for the driver plus a folding jump seat, are qualified nonpersonal use vehicles. IRS – Publication 463: Travel, Gift, and Car Expenses

The regulations provide additional categories: Other qualified nonpersonal use vehicles not subject to the strict substantiation requirements of section 274(d) include several relevant categories. Those include any vehicle designed to carry cargo with a loaded gross vehicle weight over 14,000 pounds, combines, flatbed trucks, and tractors and other special purpose farm vehicles. Dawson U.S. Tax Court Opinions: Steven F. Hoakison & Judy C. Hoakison

Election Requirements

To claim Section 179 deductions, proper elections must be made. Petitioners recognize that a taxpayer must make an election to take advantage of a section 179 deduction with respect to qualifying expenses and that Prairieland did not make such an election on its 2014 return for the truck expenses. Petitioners nevertheless contend that this failure does not bar Prairieland from a section 179 deduction for the full amount of the truck expenses for its 2014 tax year because the election is not required to be made on a taxpayer’s “first” or original return, i.e., a taxpayer can make the election on an amended return. Dawson U.S. Tax Court Opinions: Darrel L. Thoma & Amy D. Thoma

However, While there may have been an-opportunity to expense the cost of the town car under sec. 179, petitioner did not make such an election on his Federal income tax return for 2006 and is therefore not entitled to the benefits of that section Dawson U.S. Tax Court Opinions: Asif Hafeez , demonstrating the importance of making proper elections.

Practical Considerations

When considering Section 179 for SUVs and trucks:

Weight Matters: Vehicles over 6,000 pounds gross vehicle weight may avoid passenger automobile limitations but SUVs still face the $28,900 Section 179 limitation.

Business Use: You must demonstrate that more than 50% of the vehicle’s use is for business purposes and maintain proper substantiation.

Election Timing: The Section 179 election must be made on your timely filed tax return for the year the vehicle is placed in service.

Coordination with Other Deductions: The first-year limit on the depreciation deduction, special depreciation allowance, and section 179 deduction for vehicles acquired before September 28, 2017, and placed in service during 2023, is $12,200. Your combined section 179 depreciation, special depreciation allowance, and regular MACRS depreciation deduction is limited to the maximum allowable depreciation deduction for vehicles acquired after September 27, 2017, and placed in service during 2023 is $20,200. IRS – Publication 463: Travel, Gift, and Car Expenses

In summary, Section 179 does apply to SUVs and trucks, but SUVs face a specific limitation of $28,900 for 2023, while trucks may qualify for the full Section 179 deduction amount depending on their weight and classification. Proper business use substantiation and timely elections are essential for claiming these deductions.

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