Buying 4 X5M's for work. Please help me figure out what to pay!

Taran.J · 12-12-2016, 02:18 AM

How are you expensing SUV's yes they're over 6000lbs but the way my accountant explained it to me and how I use it is on trucks especially 2500 series Ram trucks since the max deduction is $25k first year and then $5k a year there after for 3 years. ($40k total in 4 years per vehicle under business name)

So a $50k 2500 expense makes sense but you'll be forking over an addition $50k per X5M after the 4 year term. If buying outright for the businesses? Mostly I ask because I have not read you'll be leasing them in which every few years why not. But with the miles I put on my truck it's cheaper to buy it for the business rather than pay for additional lease miles.

t1blackout · 12-12-2016, 09:13 AM

Hey guys! Glad I can help chime in on this.

Section 179 gives you a $25,000 max write-off for any vehicle that you purchase that is new to you regardless if it is used or not.

There is an ADDITIONAL special 2016/2017 only tax incentive for NEW ONLY vehicles that allows you to write off 50% of the new car purchase in the first year, and then you are allowed to COMBINE the Section 179 for the remaining 25,000 that is left over.

If you pay 120,000 for an X5M, you write off 60k + 25k (85k less income has to be reported that year, saving some of us about 40,000 dollars in taxes, each... which off sets the new car depreciation...

Does that make sense?

UPDATE - the dealership definitely has them in production. I do NOT want to screw them over. They are in a tight spot now and are negotiating with me. What is a FAIR price that they should be charging over MSRP where the sales rep can still make a commission and not get in trouble? I don't want to be a dick, I just want a fair price for 450k worth of vehicles.

Alan l. · 12-12-2016, 09:24 AM

$500-1K over invoice is a reasonable price to pay for an X5M to me.

t1blackout · 12-12-2016, 09:29 AM

Are there back-end incentives or anything? How does the sales rep make commission on that, any idea?

onfireX5 · 12-12-2016, 09:29 AM

Not MSRP. Invoice.

aparedes · 12-12-2016, 09:36 AM

How does this apply to the X5/X6. I was under the impression this rule applies to vehicles that weight over 6,000lb and everywhere that I look the x5/x6 shows to be about 5,000 lbs.

t1blackout · 12-12-2016, 10:00 AM

Yes they make it very confusing because it goes by GROSS Weight not curb weight. That means with all passengers and the X5M qualifies.

Taran.J · 12-12-2016, 11:45 AM

Quote:

Originally Posted by t1blackout

Hey guys! Glad I can help chime in on this.

Section 179 gives you a $25,000 max write-off for any vehicle that you purchase that is new to you regardless if it is used or not.

There is an ADDITIONAL special 2016/2017 only tax incentive for NEW ONLY vehicles that allows you to write off 50% of the new car purchase in the first year, and then you are allowed to COMBINE the Section 179 for the remaining 25,000 that is left over.

If you pay 120,000 for an X5M, you write off 60k + 25k (85k less income has to be reported that year, saving some of us about 40,000 dollars in taxes, each... which off sets the new car depreciation...

Does that make sense?

UPDATE - the dealership definitely has them in production. I do NOT want to screw them over. They are in a tight spot now and are negotiating with me. What is a FAIR price that they should be charging over MSRP where the sales rep can still make a commission and not get in trouble? I don't want to be a dick, I just want a fair price for 450k worth of vehicles.

Time to go buy my Rolls. No better time than now.

MRCUR · 12-12-2016, 12:13 PM

Quote:

Originally Posted by aparedes

How does this apply to the X5/X6. I was under the impression this rule applies to vehicles that weight over 6,000lb and everywhere that I look the x5/x6 shows to be about 5,000 lbs.

It goes by GVWR, not the literal weight of the vehicle.

aparedes · 12-12-2016, 06:03 PM

Quote:

Originally Posted by MRCUR

It goes by GVWR, not the literal weight of the vehicle.

Thank you!!

A

TortugaX5 · 12-12-2016, 06:12 PM

+1 for Gross Vehicle Weight Rating

The gross vehicle weight rating (GVWR), or gross vehicle mass (GVM) is the maximum operating weight/mass of a vehicle as specified by the manufacturer including the vehicle's chassis, body, engine, engine fluids, fuel, accessories, driver, passengers and cargo but excluding that of any trailers.

BimmerSFo · 12-13-2016, 01:58 AM

Quote:

Originally Posted by t1blackout

Hey guys! Glad I can help chime in on this.

Section 179 gives you a $25,000 max write-off for any vehicle that you purchase that is new to you regardless if it is used or not.

There is an ADDITIONAL special 2016/2017 only tax incentive for NEW ONLY vehicles that allows you to write off 50% of the new car purchase in the first year, and then you are allowed to COMBINE the Section 179 for the remaining 25,000 that is left over.

If you pay 120,000 for an X5M, you write off 60k + 25k (85k less income has to be reported that year, saving some of us about 40,000 dollars in taxes, each... which off sets the new car depreciation...

Does that make sense?

UPDATE - the dealership definitely has them in production. I do NOT want to screw them over. They are in a tight spot now and are negotiating with me. What is a FAIR price that they should be charging over MSRP where the sales rep can still make a commission and not get in trouble? I don't want to be a dick, I just want a fair price for 450k worth of vehicles.

Hey sorry, got to ask.... what happens if you lease a car... does it work the same way? thanks!

t1blackout · 12-13-2016, 04:07 AM

Leasing is a 100% write-off regardless of the weight!

t1blackout · 12-13-2016, 04:12 AM

Hey guys, thank you so much for all of your help. In the end it saved me about 20k and I still played fair and allowed the dealership to make 2k above invoice for each vehicle. Now everyone is happy I hope. Stay tuned for pictures!

arrivederci · 12-13-2016, 08:22 AM

Quote:

Originally Posted by t1blackout

Hey guys, thank you so much for all of your help. In the end it saved me about 20k and I still played fair and allowed the dealership to make 2k above invoice for each vehicle. Now everyone is happy I hope. Stay tuned for pictures!

Well done! Enjoy the cars...they're tons of fun!

BimmerSFo · 12-13-2016, 11:07 AM

Quote:

Originally Posted by t1blackout

Leasing is a 100% write-off regardless of the weight!

That is ifnyou put the company as the registered owner and yourself as a second right?

Btw glad it worked out!

MRCUR · 12-13-2016, 11:15 AM

Quote:

Originally Posted by BimmerSFo

Quote:

Originally Posted by t1blackout

Leasing is a 100% write-off regardless of the weight!

That is ifnyou put the company as the registered owner and yourself as a second right?

Btw glad it worked out!

Just to be clear on the 100% - it's a 100% deductible item if you use the vehicle 100% for business (no personal use).

Same goes on the Section 179 deduction (which requires business use be above 50%).

tastelid · 12-13-2016, 11:29 AM

Quote:

Originally Posted by MRCUR

Just to be clear on the 100% - it's a 100% deductible item if you use the vehicle 100% for business (no personal use).

Same goes on the Section 179 deduction (which requires business use be above 50%).

and of course an IT company is going to use 4 X5Ms purely for business purposes

Alberta · 12-13-2016, 11:44 AM

.

IndyM · 12-13-2016, 12:22 PM

Congrats! I used Sect 179 and Bonus Depreciation when I picked up my 2017 in August. I did the same on my 2013 X5. Great program... the American Recovery and Reinvestment Act hard at work! They make the rules, I just play by them...

I'm in the commercial real estate business, so I'm in my car constantly... no grey area interpretation there. And I take 100% of the car as business use because I have other cars I use on the weekends (my accountant said this is an important distinction, just for anyone else considering this strategy).

I paid $500 over invoice to special order one of the first '17s. I'd say $2k over invoice, although above what many are getting (especially for 4), is not crazy IF they are actually able to deliver 4 cars to your specs in a really tight timeline.

Keep us posted on progress and make sure you post pictures once you take delivery!

FSociety · 12-13-2016, 10:32 PM

Let me know if you need help contact my friend Carmine @ BMW of Bridgewater NJ

t1blackout · 12-13-2016, 11:41 PM

IndyM - I totally agree. We are sales people and our main customers are in DC several hours away. We travel constantly and almost all of my best friends work for my company. We work for fun and it never really stops. We all have our own cars for personal use. This will actually be my slower and more practical car.

These cars will be in the companies name and they (and me) will be secondary drivers. Anyone at the company could technically use them but we will be the primary drivers.

My accountant said that it is realistic to write off 90-95% for personal use as long as you have a secondary vehicle that you put considerable miles on.

12-12-2016, 02:18 AM	#23
Taran.J Major General 1103 Rep 7,063 Posts Drives: BMW, LEX, MBZ, RAM, TESLA Join Date: Jul 2012 Location: Graham, WA iTrader: (7)	How are you expensing SUV's yes they're over 6000lbs but the way my accountant explained it to me and how I use it is on trucks especially 2500 series Ram trucks since the max deduction is $25k first year and then $5k a year there after for 3 years. ($40k total in 4 years per vehicle under business name) So a $50k 2500 expense makes sense but you'll be forking over an addition $50k per X5M after the 4 year term. If buying outright for the businesses? Mostly I ask because I have not read you'll be leasing them in which every few years why not. But with the miles I put on my truck it's cheaper to buy it for the business rather than pay for additional lease miles. __________________ E90 Build Thread (SOLD) http://www.e90post.com/forums/showthread.php?t=809436 F15 Build Thread (SOLD) http://f15.bimmerpost.com/forums/sho....php?t=1064084
	Appreciate 0 Quote

12-12-2016, 09:13 AM	#24
t1blackout Enlisted Member 100 Rep 42 Posts Drives: Ordering 2017 X5M Join Date: Dec 2016 Location: Charlottesville, VA iTrader: (0)	Hey guys! Glad I can help chime in on this. Section 179 gives you a $25,000 max write-off for any vehicle that you purchase that is new to you regardless if it is used or not. There is an ADDITIONAL special 2016/2017 only tax incentive for NEW ONLY vehicles that allows you to write off 50% of the new car purchase in the first year, and then you are allowed to COMBINE the Section 179 for the remaining 25,000 that is left over. If you pay 120,000 for an X5M, you write off 60k + 25k (85k less income has to be reported that year, saving some of us about 40,000 dollars in taxes, each... which off sets the new car depreciation... Does that make sense? UPDATE - the dealership definitely has them in production. I do NOT want to screw them over. They are in a tight spot now and are negotiating with me. What is a FAIR price that they should be charging over MSRP where the sales rep can still make a commission and not get in trouble? I don't want to be a dick, I just want a fair price for 450k worth of vehicles.
	Appreciate 0 Quote

12-12-2016, 09:24 AM	#25
Alan l. Major General 5450 Rep 8,815 Posts Drives: 2020 F95 X5M Competition Join Date: Jun 2009 Location: United States iTrader: (9)	$500-1K over invoice is a reasonable price to pay for an X5M to me. __________________
	Appreciate 0 Quote

12-12-2016, 09:29 AM	#26
t1blackout Enlisted Member 100 Rep 42 Posts Drives: Ordering 2017 X5M Join Date: Dec 2016 Location: Charlottesville, VA iTrader: (0)	Are there back-end incentives or anything? How does the sales rep make commission on that, any idea?
	Appreciate 0 Quote

12-12-2016, 09:29 AM	#27
onfireX5 Brigadier General 3619 Rep 4,532 Posts Drives: F90M5,F85X5M Join Date: Jul 2015 Location: Va iTrader: (0)	Not MSRP. Invoice.
	Appreciate 0 Quote

		BMW X5 and X6 Forum (F15/F16) > BMW X5 (F15) and BMW X6 (F16) Forum > BMW X5M (F85) and X6M (F86) Forum
Buying 4 X5M's for work. Please help me figure out what to pay!

12-12-2016, 09:36 AM	#28
aparedes Second Lieutenant 302 Rep 280 Posts Drives: M2CS Join Date: May 2016 Location: Miami iTrader: (0)	How does this apply to the X5/X6. I was under the impression this rule applies to vehicles that weight over 6,000lb and everywhere that I look the x5/x6 shows to be about 5,000 lbs.
	Appreciate 0 Quote

12-12-2016, 10:00 AM	#29
t1blackout Enlisted Member 100 Rep 42 Posts Drives: Ordering 2017 X5M Join Date: Dec 2016 Location: Charlottesville, VA iTrader: (0)	Yes they make it very confusing because it goes by GROSS Weight not curb weight. That means with all passengers and the X5M qualifies.
	Appreciate 0 Quote

12-12-2016, 06:12 PM	#33
TortugaX5 Private First Class 93 Rep 159 Posts Drives: 2016 F15 X5 X35i Join Date: Dec 2015 Location: Columbus, OH iTrader: (0)	+1 for Gross Vehicle Weight Rating The gross vehicle weight rating (GVWR), or gross vehicle mass (GVM) is the maximum operating weight/mass of a vehicle as specified by the manufacturer including the vehicle's chassis, body, engine, engine fluids, fuel, accessories, driver, passengers and cargo but excluding that of any trailers. __________________
	Appreciate 0 Quote

12-13-2016, 04:07 AM	#35
t1blackout Enlisted Member 100 Rep 42 Posts Drives: Ordering 2017 X5M Join Date: Dec 2016 Location: Charlottesville, VA iTrader: (0)	Leasing is a 100% write-off regardless of the weight!
	Appreciate 0 Quote

12-13-2016, 04:12 AM	#36
t1blackout Enlisted Member 100 Rep 42 Posts Drives: Ordering 2017 X5M Join Date: Dec 2016 Location: Charlottesville, VA iTrader: (0)	Hey guys, thank you so much for all of your help. In the end it saved me about 20k and I still played fair and allowed the dealership to make 2k above invoice for each vehicle. Now everyone is happy I hope. Stay tuned for pictures!
	Appreciate 0 Quote

12-13-2016, 11:44 AM	#41
Alberta Lieutenant Colonel 2035 Rep 1,842 Posts Drives: F90 Join Date: Aug 2015 Location: somewhere iTrader: (0)	.
	Appreciate 0 Quote

12-13-2016, 12:22 PM	#42
IndyM Second Lieutenant 73 Rep 216 Posts Drives: 2017 X5M (DG/MR) Join Date: May 2016 Location: Indianapolis, IN iTrader: (0)	Congrats! I used Sect 179 and Bonus Depreciation when I picked up my 2017 in August. I did the same on my 2013 X5. Great program... the American Recovery and Reinvestment Act hard at work! They make the rules, I just play by them... I'm in the commercial real estate business, so I'm in my car constantly... no grey area interpretation there. And I take 100% of the car as business use because I have other cars I use on the weekends (my accountant said this is an important distinction, just for anyone else considering this strategy). I paid $500 over invoice to special order one of the first '17s. I'd say $2k over invoice, although above what many are getting (especially for 4), is not crazy IF they are actually able to deliver 4 cars to your specs in a really tight timeline. Keep us posted on progress and make sure you post pictures once you take delivery!
	Appreciate 1 Quote

12-13-2016, 10:32 PM	#43
FSociety IG @bmwF9xG80 3813 Rep 7,593 Posts Drives: G80 M3, X4M, G07 X7m50 Join Date: Apr 2012 Location: NYC to NJ to Orlando FL iTrader: (3) Garage List 2023 BMW G80 M3 [0.00] 2020 BMW X4MC [0.00] 16' BMW X4 M40i [10.00] 06 Cadillac STS [0.00]	Let me know if you need help contact my friend Carmine @ BMW of Bridgewater NJ __________________ 60-130mph 6.5s X4M #HCP 60-130mph 5.0s G80 M3 #OrlandoAutowerks Sauce IG: @bmwF9XG80
	Appreciate 0 Quote

12-13-2016, 11:41 PM	#44
t1blackout Enlisted Member 100 Rep 42 Posts Drives: Ordering 2017 X5M Join Date: Dec 2016 Location: Charlottesville, VA iTrader: (0)	IndyM - I totally agree. We are sales people and our main customers are in DC several hours away. We travel constantly and almost all of my best friends work for my company. We work for fun and it never really stops. We all have our own cars for personal use. This will actually be my slower and more practical car. These cars will be in the companies name and they (and me) will be secondary drivers. Anyone at the company could technically use them but we will be the primary drivers. My accountant said that it is realistic to write off 90-95% for personal use as long as you have a secondary vehicle that you put considerable miles on. Last edited by t1blackout; 12-13-2016 at 11:48 PM..
	Appreciate 0 Quote