How do heavy-duty versus light-duty truck weights impact depreciation schedules for business vehicles?
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The distinction between heavy-duty and light-duty trucks is critical for determining the applicable depreciation schedules and deduction limits for business vehicles under the Internal Revenue Code. The key factor is the vehicle’s gross vehicle weight rating (GVWR), which determines whether the vehicle is subject to the so-called “luxury automobile” depreciation limits of IRC §280F, as well as the special rules for Section 179 expensing and bonus depreciation.
1. Definitions and Weight Thresholds
- Light-Duty Trucks and Vans: For depreciation purposes, a “passenger automobile” includes most four-wheeled vehicles manufactured primarily for use on public streets, roads, and highways, and rated at 6,000 pounds gross vehicle weight (GVW) or less (for trucks and vans, the threshold is based on loaded GVWR, not unloaded weight).
- Heavy-Duty Trucks and Vans: Vehicles with a GVWR over 6,000 pounds are not considered “passenger automobiles” for purposes of the §280F depreciation limits. For SUVs, the relevant range is over 6,000 pounds but not more than 14,000 pounds.
2. Depreciation Schedules and Limits
A. Light-Duty Trucks (≤ 6,000 lbs GVWR)
- Depreciation Limits: Subject to the annual “luxury automobile” limits under IRC §280F. For 2025, the maximum first-year depreciation deduction (including Section 179 and bonus depreciation) for a passenger automobile is $20,400 if bonus depreciation is claimed, or $12,400 if not.
- Section 179 Deduction: The Section 179 deduction is also subject to the §280F limits. For example, if the limit is $20,400, the combined Section 179, bonus, and regular depreciation cannot exceed this amount in the first year.
- Bonus Depreciation: Bonus depreciation is allowed, but the total first-year deduction is still capped by the §280F limit.
- Depreciation Method: MACRS 200% declining balance (DB) over 5 years is generally used, but the deduction is limited by the annual caps.
B. Heavy-Duty Trucks (> 6,000 lbs GVWR)
- Depreciation Limits: Not subject to the §280F “luxury automobile” limits. This means the taxpayer can claim the full MACRS depreciation deduction, Section 179 expensing, and bonus depreciation (if applicable), subject only to the general rules for those provisions.
- Section 179 Deduction: For SUVs (including certain pickups and vans) with a GVWR over 6,000 lbs but not more than 14,000 lbs, the Section 179 deduction is capped at $25,000 (inflation-adjusted to $31,300 for 2025). However, this cap does not apply to vehicles that:
- Are designed to seat more than nine persons behind the driver,
- Have a cargo area of at least 6 feet in interior length that is not readily accessible from the passenger compartment, or
- Have an integral enclosure, no seating behind the driver, and no body section protruding more than 30 inches ahead of the windshield.
- Bonus Depreciation: 100% bonus depreciation is available for qualified property placed in service after January 19, 2025, under the new law, with no dollar cap for heavy-duty vehicles.
- Depreciation Method: MACRS 200% DB over 5 years is generally used, and the full deduction is allowed (subject to business use percentage).
3. Practical Impact
- Light-Duty Trucks: The annual deduction is limited, so it may take many years to fully depreciate the cost of the vehicle. Any unrecovered basis after the recovery period can be deducted in subsequent years, subject to the annual cap.
- Heavy-Duty Trucks: The entire cost (up to the Section 179 limit, if applicable) can often be expensed in the first year, especially if bonus depreciation is claimed. This provides a significant up-front tax benefit.
4. Special Rules for SUVs
- SUVs over 6,000 lbs but not more than 14,000 lbs: Section 179 deduction is capped (see above), but bonus depreciation is not capped, so the full cost can often be deducted in the first year if bonus depreciation is claimed.
- SUVs over 14,000 lbs: No Section 179 or bonus depreciation limits apply; full expensing is available.
5. Summary Table
6. Conclusion
Heavy-duty trucks and vans (over 6,000 lbs GVWR) are not subject to the annual “luxury automobile” depreciation limits and can generally be fully expensed in the first year through Section 179 and/or bonus depreciation, subject to certain caps for SUVs. Light-duty trucks and vans (6,000 lbs GVWR or less) are subject to strict annual depreciation caps, which can significantly slow the cost recovery for tax purposes. The weight classification of the vehicle is therefore a critical factor in determining the allowable depreciation schedule and the timing of deductions for business vehicles.
If you have a specific vehicle in mind, providing the exact GVWR and intended business use will allow for a more tailored analysis.
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