Question

The law places special limitations on cost recovery deductions for passenger automobiles (any four-wheeled vehicle manufactured for use on public streets, roads, and highways with an unloaded gross vehicle weight rating of 6,000 pounds or less.)

True or False

Answer 1

The law places special limitations on cost recovery deductions for passenger automobiles (any four-wheeled vehicle manufactured for use on public streets, roads, and highways with an unloaded gross vehicle weight rating of 6,000 pounds or less)

Step-by-step explanation:

The statement is true. The law does indeed place special limitations on cost recovery deductions for passenger automobiles with an unloaded gross vehicle weight rating of 6,000 pounds or less. These limitations are put in place to ensure that the deduction is not abused and to promote fair taxation.

For example, under the current tax law, there are specific rules regarding the depreciation deductions for passenger automobiles used for business purposes. These rules limit the amount that can be deducted each year and require the taxpayer to track and maintain records of the vehicle's use and expenses.

Therefore, it is important for individuals and businesses to understand and comply with these limitations to avoid any potential tax issues.