The IRS has decided moving vans and some delivery trucks are not “luxury automobiles.” This may sound like a blinding insight into the obvious, but it carries important consequences for depreciation deductions. Luxury autos, previously defined solely on the basis of cost, are subject to more stringent depreciation caps than other assets.
On July 7, 2003, the IRS published temporary regulations in the Federal Register that exclude from the luxury auto rules “qualified nonpersonal use vehicles,” meaning trucks that would typically be purchased only for business use. The temporary rules apply to vans and light trucks placed in service on or after July 7. At the same time, the IRS published identical proposed regulations and invited comment on “other options that provide administrable objective standards and are consistent with the statutory purpose.”
