BMW Models that Qualify for Section 179 Tax Deduction
Tax Advantages
Since the BMW X5, X6, and X7 each have a Gross Vehicle Weight Rating (GVWR) which exceeds 6,000 pounds, they may be eligible for full depreciation during the first year of ownership when used solely for business purposes**. Purchasing an X5, X6, or X7 could potentially deliver significant tax advantages as compared to a similarly priced luxury sedan.
Tax Depreciation Comparison
Listed below are three comparisons that illustrate the tax depreciation advantages for business owners who purchase a new BMW X5, X6, or X7 before January 1, 2023†. Please consult with your tax professional in order to determine how this information can be applied to your individual business situation.
$66,750 BMW X5 vs $66,750 Luxury Car |
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| Total allowable depreciation for 1st year of ownership* | ||
| BMW X51 100% Depreciation $66,750 |
VS | Luxury Car2 28.5% Depreciation $19,200 |
$78,300 BMW X6 vs $78,300 Luxury Car |
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| Total allowable depreciation for 1st year of ownership* | ||
| BMW X61 100% Depreciation $78,300 |
VS | Luxury Car2 24.5% Depreciation $19,200 |
In this situation, your business could deduct 100% of the X6 cost (a $78,300 Tax Deduction for Your Business), but your business can’t even deduct the normal 27% 1st-year deduction on the luxury sedan because that amount is CAPPED at $19,200. So instead of $21,100 as a 1st-year depreciation deduction, you can only claim a maximum of $19,200.
$92,600 BMW X7 vs $92,600 Luxury Car |
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| Total allowable depreciation for 1st year of ownership* | ||
| BMW X71 100% Depreciation $92,600 |
VS | Luxury Car2 21% Depreciation $19,200 |
In this situation, your business could deduct 100% of the X7 cost (a $92,600 Tax Deduction for Your Business), but your business can’t even deduct the normal 27% 1st-year deduction on the luxury sedan because that amount is CAPPED at $19,200. So instead of $25,000 as a 1st-year depreciation deduction, you can only claim a maximum of $19,200.
Individual tax situations may vary. The information presented was accurate at time of publishing. Federal rules and tax guidelines are subject to change. Consult your tax advisor for complete details on rules applicable to your business.
*Comparisons based on Section 179 and 168(k) of the Internal Revenue Code, which allows for additional first year depreciation for eligible vehicles and reflects figures for owners who purchase vehicles for 100 percent business use and place vehicles in service by January 1, 2023.
1BMW X5/X6 shown fully depreciated in Year One.
2Luxury car depreciation can continue year two at $18,000, year three at $10,800, and subsequent years at $6,460 until the vehicle is fully depreciated or sold.
**With Gross Vehicle Weight Ratings (GVWR) of more than 6,000 pounds, these BMW models are classified as “heavy SUVs.” Gross Vehicle Weight Rating (GVWR) is the manufacturer’s rating of the vehicle’s maximum weight when fully loaded with people and cargo.
†Comparisons based on Section 179 and 168(k) of the Internal Revenue Code, which allows for additional first year depreciation for eligible vehicles and reflects figures for owners who purchase vehicles for 100 percent business use and place vehicles in service by January 1, 2023.