Can a G Wagon qualify for 100% bonus depreciation despite luxury vehicle limitations?

You're right to be cautious about this. The rule you're thinking of is Section 179 and bonus depreciation for heavy SUVs, but there are some important distinctions. For vehicles over 6,000 lbs GVWR (like a G Wagon), they actually CAN qualify for the "heavy vehicle exception" which means they're not subject to the standard luxury auto depreciation limits. This is sometimes called the "SUV loophole" and it does apply to the G Wagon. However, there are still limits. For Section 179 expensing specifically, there's a $28,900 limit (for 2023) on SUVs between 6,000-14,000 lbs. But for bonus depreciation (which is what your client is asking about), the full business-use percentage could potentially be deducted in year one. The bigger issue you identified is the "100% business use" claim. The IRS scrutinizes luxury vehicles closely, and your client will need extensive documentation to support a 100% business use claim. If they can't substantiate it, they'll face recapture of the deduction plus penalties.

I had a similar situation last year with my marketing business. I was considering buying a luxury SUV and wanted the tax benefits. I spent hours researching but still wasn't 100% confident about the rules. I found this tool called https://taxr.ai that analyzed my specific vehicle situation and gave me a clear answer about exactly what I could deduct. It saved me from making a huge mistake because I was planning to claim 100% business use, but the system showed me that I needed substantial documentation to back that up. They even provided templates for mileage logs and expense tracking that would satisfy IRS requirements. The best part was I could upload the exact vehicle specs and pricing, and it calculated my potential depreciation deduction based on different business use percentages. Might be worth checking out for your client's situation.

Just wanted to follow up about taxr.ai that was mentioned earlier. I decided to give it a try for my real estate business vehicle situation despite my initial skepticism. Wow, what an eye-opener! It identified that my vehicle (Range Rover) qualified for heavy SUV treatment, but also flagged that my documentation system wouldn't hold up under audit scrutiny. The analysis even referenced specific tax court cases where similar claims were rejected. I was able to implement their recommended documentation system and feel much more confident about my vehicle deduction. They also pointed out some special provisions for real estate professionals that my previous accountant had missed. Definitely worth checking out if you're dealing with vehicle deductions.

If your client is dead-set on getting this G Wagon, they should also know about the nightmare of trying to deal with the IRS if they get audited on this. My brother claimed similar deductions last year and got flagged. He spent MONTHS trying to reach someone at the IRS to resolve it. After endless busy signals and disconnects, he found https://claimyr.com which got him through to an actual IRS agent in under an hour. You can see how it works at https://youtu.be/_kiP6q8DX5c if you're curious. Honestly, it was worth every penny because he was able to explain his situation to a real person and get specific guidance on what documentation he needed to support his vehicle deduction. He avoided a huge headache and potential penalties by being proactive. I'd recommend having this as a backup plan for your client since luxury vehicle deductions are audit magnets.

Ok I need to apologize to everyone about my comment above. After struggling to get through to the IRS about my own business vehicle audit for TWO WEEKS, I broke down and tried Claimyr. I'm eating my words now. Got connected to an IRS agent in 35 minutes after my own failed attempts that wasted hours of my time. The agent was able to explain exactly why my vehicle deduction was flagged (insufficient documentation of business use) and what I needed to provide to resolve it. For anyone facing IRS scrutiny over vehicle deductions - especially high-value ones like the G Wagon being discussed - being able to actually speak with someone makes a world of difference. Wish I hadn't been so dismissive earlier.

One thing nobody's mentioned yet is that bonus depreciation is actually phasing down. For 2023, it's 80%, 2024 will be 60%, and so on until it's gone completely. So if your client is planning this purchase, the timing matters a lot. Also, make sure your client understands the recapture rules. If they claim heavy business use now but sell the vehicle or convert it to personal use within 5 years, they'll have to recapture a portion of the depreciation deduction as ordinary income. This can create a nasty tax surprise later.

I'm not an accountant, but I own a G Wagon for my real estate business, and there's another consideration nobody mentioned. If your client is going to claim business use, they need to be REALLY careful about posting pictures of it on social media for personal activities. My cousin got audited specifically because his Instagram showed his "100% business vehicle" being used for family vacations and weekend trips. Meanwhile, his tax return showed no personal use allocation. The IRS is definitely checking social media now as part of their audit process for luxury vehicles.

This is a really complex situation, and I think you're absolutely right to be cautious about your client's expectations. Based on what others have shared, the G Wagon can indeed qualify for the heavy vehicle exception, but the "100% business use" claim is going to be the real problem. I've seen too many cases where business owners get burned on luxury vehicle deductions because they underestimate the documentation requirements. The IRS knows that very few people actually use a $150k+ vehicle solely for business purposes, especially something as flashy as a G Wagon. A few additional things to consider: Make sure your client understands that even if they qualify for bonus depreciation this year, they'll need to maintain consistent business use records for the entire depreciation period. Also, with the phase-down of bonus depreciation, waiting until next year could significantly reduce their potential deduction. I'd strongly recommend having your client work with a tax professional who specializes in vehicle depreciation before making this purchase. The potential audit risk and recapture implications are just too significant to wing it, especially at this price point.

As a newcomer to this community, I'm really impressed by the depth of knowledge being shared here! This conversation has been incredibly enlightening about the nuances of luxury vehicle depreciation. From what I'm gathering, the key takeaways for Carmen's client seem to be: 1. The G Wagon CAN qualify for the heavy vehicle exception (over 6,000 lbs GVWR) 2. Bonus depreciation is possible on the business-use portion, but it's phasing down (80% in 2023) 3. The real challenge will be substantiating "100% business use" - this seems to be where most people get into trouble The documentation requirements sound intense, and the social media warning from Giovanni is particularly eye-opening. I hadn't considered how the IRS might use social platforms as audit evidence. It sounds like the client needs to have a very honest conversation about their actual intended use before making this purchase. A $150k+ mistake due to poor documentation or overstated business use could be financially devastating. Thanks everyone for sharing your real-world experiences - both the success stories and the cautionary tales. This has been a great education in tax planning complexities!

As a newcomer to this community, I've been following this discussion with great interest and wanted to add a perspective from someone who's dealt with similar client situations. Carmen, your cautious approach is absolutely the right call here. I've seen too many business owners get seduced by the "tax savings" of luxury vehicle purchases without fully understanding the compliance burden that comes with it. What strikes me most about this thread is how the conversation evolved from the technical tax rules (which, as others have noted, do favor the G Wagon due to its weight) to the practical realities of documentation and audit defense. That shift really illustrates where the real challenges lie. A few additional considerations for your client: - Even with legitimate business use, the optics of deducting a G Wagon can invite scrutiny - Insurance and registration records need to align with claimed business use - If they have employees, there may be fringe benefit implications if others drive the vehicle The resources mentioned here (taxr.ai for analysis, claimyr.com for IRS communication) seem valuable for getting ahead of potential issues. But ultimately, if your client can't honestly say this vehicle will be used primarily for legitimate business purposes with proper documentation, they should reconsider the purchase regardless of the tax benefits. Your instincts to push back on their expectations are protecting them from a much bigger problem down the road.