The Truth About the Range Rover Tax Loophole
A popular social media claim about a legal “tax loophole” is gaining traction, with “get rich quick” advocates advising people to write off the cost of a luxury car like a Range Rover or Mercedes-Benz G-Wagon on their taxes. But isn’t it too good to be true? Certainly. It’s always like that. When it comes to your finances – especially taxes – any “loophole” is probably too good to be true . Here’s what you need to know about the so-called “Range Rover loophole” and what it means for you when you’re trying to get a luxury car tax write-off.
What is the Range Rover tax loophole?
The lawsuit comes from creators of the “get rich quick” industry, which offers people the opportunity to allegedly write off a significant portion or all of the cost of an expensive car through a special tax deduction. They cite IRS Internal Revenue Code Section 179 as the basis for this supposed loophole.
Unfortunately, this is classic TikTok financial advice . The truth is that under IRS Tax Code Section 179, businesses may be eligible to write off a G-Wagon if it is used for business purposes at least half the time. Section 179 allows businesses to deduct the full cost of certain assets, such as vehicles, in the year they are placed in service, rather than amortizing the costs over several years. But there are very strict requirements. Additionally, there are limits on the deductible amount for luxury vehicles, which in 2023 exceeds $19,800 for cars and $20,500 for trucks and vans.
What does this mean for you
Despite what your TikTok feed may try to tell you, you can’t just go out and buy a Range Rover for personal use and write it all off. The IRS makes it clear that personal vehicles do not qualify, even if you use them for occasional business travel.
In fact, the “Range Rover loophole” is not a loophole for the average person at all. It’s based on a legal but narrowly defined tax deduction that only applies to certain small businesses that actually need expensive work vehicles, such as heavy-duty trucks.
So while viral claims about an easy way to write off a luxury personal car sound tempting, they don’t match the realities of tax law. As with most get-rich-quick schemes, if it seems too good to be true, it probably is .