I know this was kinda discussed in an earlier thread, but does anyone know *definitively* whether the 2006 FEH qualifies (or will qualify) for the $2,000 '05 IRS deduction? I just checked the IRS website, and they do NOT list any 2006 models. Granted, their last "Tax Tip" on the subject was updated April 4, and we all know how the wheels of government sometimes move glacially. If anyone has some firm info on this, I'd appreciate it!

Regards,
Fred

NB Okay, so I didn't look hard enough... they list the 2006 Highlander and Lexus RX 400h in releases in May & June.

 

As I understand it, the deduction is based on the date of purchase,not the model year. The $2000 deduction is set to expire at the end of this year (31 December 2005) and next year it will be $500 or $600, I forget.

I can't say anything is definite except how p.o.'d I will be if I can't take the $2000 deduction on my '06. Time for some internet searching. I'll get back to ya'....

 

Well, I'm considering an '06 FEH, and any deduction I could get would be helpful. I've done *some* searching, and I believe the relevant page at the IRS is this.
What it says is this:

"Clean-Fuel Vehicle Deduction Available for Certain Models

The original purchaser of a qualifying hybrid gas-electric car may deduct $2,000 for the year the vehicle is first used, if that year is before 2006. In 2006, the deduction is scheduled to drop to $500.

These vehicles qualify for the clean-fuel vehicle deduction:

• Lexus RX 400h — Model Year 2006<
• Ford Escape Hybrid — Model Year 2005<
• Toyota Prius — Model Years 2001 through 2005<
• Toyota Highlander Hybrid — Model Year 2006<
• Honda Insight — Model Years 2000 through 2005<
• Honda Civic Hybrid — Model Years 2003 and 2005<
• Honda Accord Hybrid — Model Year 2005"<

(Bold italics mine)
My assumption is that each model (or its specifications) must be presented and be qualified for the deduction. The Lexus was added in June, I did a search on the IRS site for the Escape, and only found the qualification for the 2005, which I believe was late last year. Obviously, the '06 FEH should be on the list, but if it isn't..... Hey, it could be added next week for all we know!

I wish New Jersey would add a deduction also. They have one for electric vehicles only.

Fred

 

The Deduction was extended at the $2000 rate. I believe they did it in the Highway Bill, which Bush is yet to sign (therefore not law yet).

Chris Brown

 

The only way to really resolve this question is to ask the IRS, which I have not done . But I did look at the IRS web site. It does mentioned teh 2005 Escape but also refers the reader to publication 535. This publication lists the elgible vehicles by brand and does not list the year. Again, I think calling the IRS and getting a clarification is the best thing do to (which if and when I have time I'll try to do) but in the meantime, here is the relevant text from the IRS publication:
----------------------------------------
Deduction for Clean-Fuel Vehicle Property

The deduction for this property may be claimed regardless of whether the property is used in a trade or business.

Clean-fuel vehicle property. Clean-fuel vehicle property is either of the following kinds of property.

1. A motor vehicle (defined earlier) produced by an original equipment manufacturer and designed to be propelled by a clean-burning fuel. These include designated hybrid gas-electric automobiles which, at this time, only include the Ford Escape, Honda Insight, Honda Civic Hybrid, and Toyota not qualify for the electric vehicle credit.Prius.
-------------------------------------------------

This text comes from page 45 of IRS publication 535.