Tesla Model X qualifies for $25,000 tax break

If You Own A Business, Look Into Section 179

Tesla Motors Inc. Model X SUV Reveal
Tesla Motors Inc. Model X SUV Reveal / Image Credit: Bloomberg via Getty Images
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While lightweight is usually better for electric vehicles, the new Tesla Model X is going to be pleasantly plump for some purchasers. It turns out that the CUV's curb weight of 5,441 pounds means that it will qualify for something called a Section 179 tax break. For the right buyer, that means that the federal government will take $25,000 off the price of a new Model X.

We were turned on to this possibility by discussion on the Tesla Motors forum and the Tesla Motors Club, where the possibility of the Section 179 benefit was talked about before the car was revealed in late September. As you can see in this picture from the event, the official GVWR (Gross Vehicle Weight Rating) of Elon Musk's Model X is 6,768 pounds. Armed with this knowledge, we asked Tesla what the official word is, and Tesla's Alexis Georgeson told AutoblogGreen, "Yes, the curb weight of Model X is 5,441 lbs. So we expect the GVWR to exceed 6,000 lbs. This means a Section 179 deduction could be taken for to up to $25,000 of the purchase price."

To qualify for a Section 179 tax break, the IRS requires that the item purchased be acquired for business use and that the property must also be, "An integral part of ... furnishing transportation." It doesn't seem like the Model X would have a problem meeting that second definition but Georgeson cautioned potential buyers by saying that, "Tesla always encourages its customers to consult with their personal tax accountant as each individual's tax situation may be different and Tesla does not guarantee this deduction." You can find the official IRS information about Section 179 here.

The overall Deduction Limit for 2015 is $25,000, but there is an online petition requesting that the limit for Section 179 be raised back to $500,000, where it was last year, in case you were to buy a fleet of these EVs. With all of the ups and downs in the tax code, there have been stories about the demise of this "Hummer Loophole" before, but it's still going strong.

If you don't own a business, then you might still qualify for the standard $7,500-tax break from the federal government.

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