As we begin counting down toward the end of yet another year, it’s time for our annual reminder about the generous tax breaks available to buyers of both new and used Liberty Coaches.
This year, like last, available tax breaks rank among the largest ever. Thanks to changes included in the Tax Cuts and Jobs Act of 2017, the Section 179 deduction and income phase-out limits –for qualifying equipment purchases made by business owners – now stand at $1 million and $2.5 million, respectively. Starting this year, both of those amounts will be indexed to inflation, as well. Bonus depreciation is still 100%, and – importantly – now includes both new and used equipment.
The used equipment qualification is of particular importance for Liberty Coach buyers this year. One of the requirements for bonus Section 179 expensing – that is, the election to deduct the purchase as an expense rather than to depreciate up to a specified amount of the cost – is that the qualifying property must be placed in service during the tax year involved. Since the unprecedented demand for new Elegant Lady coaches has pushed delivery of any new orders well into 2020, only pre-owned coach buyers can take full advantage of the tax break opportunity for 2019.
Of course, it’s an exceptionally good time to buy a pre-owned Liberty Coach regardless of tax considerations. Our inventory of late model Elegant Ladies is exceptionally deep and includes several coaches that have already been significantly discounted. When you further subtract the year-end tax breaks, the savings are truly dramatic. Consider the following two examples:
2014 Ravello Triple Slide Edition (Stock No. 7137-B) – During the summer, we reduced the price of this updated beauty to $1,350,000, and now every dollar of that amount qualifies for the 2019 tax breaks described above. The purchaser can claim a deduction of $1 million and then apply the 100% bonus depreciation to the remaining $350,000. For 35% tax bracket buyers, that adds up to cash savings of $472,500 and a total after-tax cost of $877,500.
2010 Gavetta Double Slide Edition (Stock No. 5283-A) – The entire $850,000 listing price of this gorgeous Prevost XLII may be deducted under Section 179, for cash savings (35% tax bracket) of $297,500 and a total after-tax cost of $553,500.
Of course, there are important details about qualified purchases and other regulations to consider; for a full rundown, download our 2019 Tax Update. And as always, you should consult with your own tax adviser before making any decisions. But the benefits of buying now are clear.
So don’t wait – take a long look at our current pre-owned inventory and find the coach that’s right for you. Once you do, we’ll do everything in our power to finalize your purchase before the December 31 deadline, and make sure you save every dollar you’re entitled to.