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🚗 Turn Your Personal Vehicle Into a Big Tax Deduction 🚗

🚗 Turn Your Personal Vehicle Into a Big Tax Deduction 🚗

Starting in 2025, the One Big Beautiful Bill Act (OBBBA) gives business owners a no-new-cash-outlay way to unlock significant deductions.

Here’s how:
Convert your personal-use vehicle to business use, and it’s treated as “placed in service” on the conversion date. Thanks to 100% bonus depreciation, you can deduct up to the vehicle’s full fair market value (no Section 179, but bonus applies automatically unless you opt out).

💡 Example:
Vehicle FMV = $30,000
Business use = 70%
Deduction = $21,000 on your 2025 tax return

Types of Vehicles
– Heavy SUVs, pickups, vans (GVWR > 6,000 lbs) = full deduction
– Smaller vehicles = still up to $20,200 first year

Rules to know:

  • Deduct the lower of FMV or adjusted basis at conversion
  • All assets in the same class are “in or out” for bonus depreciation

Selling later? Your gain/loss basis changes