what is a luxury automobile for tax purposes

Best answer

A 鈥渓uxury鈥?vehicle, is a5-year vehicle that cost more than the depreciation limits. It hasn鈥檛 fully depreciated in the 6 tax years. It can be fully depreciated for book purposes but must be kept operable until the remaining cost is deducted.

People also ask

  • What is luxury car tax and how does it work?

  • The ATO states luxury car tax is only applied to eligible vehicles under two years old. If the car is being sold for a second time, it will only attract LCT if it has increased in value. Given most cars depreciate over time, this is an unlikely scenario.

  • Can I deduct depreciation on a luxury vehicle?

  • The tax law limits the amount you can deduct for depreciation of your car, truck or van. The section 179 deduction is also treated as depreciation for purposes of these limits. The maximum amount you can deduct each year depends on the year you place the car in service. The 2020 luxury vehicle tables appear below. 1 The tables show

  • What is the ATO鈥檚 luxury car tax?

  • According to the ATO, the luxury car tax is set at 33% of the value of the vehicle above the luxury car threshold. For the 2019/2020 financial year, the thresholds have been set at $75,526 for 鈥榝uel-efficient vehicles鈥?and $67,525 for all other vehicles.

  • What is the difference between a luxury car and a commercial vehicle?

  • A car, for luxury car tax purposes, is a motor-powered road vehicle designed to carry a load of less than two tonnes and fewer than nine passengers. It does not include motorcycles or similar vehicles. Commercial vehicles are designed for the principal purpose of carrying goods used for business or trade. They are not subject to LCT.

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