The kicker is, if the vehicle has over 6,000 lbs gross vehicle weight, you can "expense" the cost over one year, as opposed to "depreciating" the expense over a number of years. So instead of a string of little deductions for a few years, you get one big deduction for one year. And this is why BMW designed the X6 with a 6,000 lbs gross vehicle weight rating. The first car designed with the IRS code as its technical specification!
Income: $600,000Cost of Van #1: -$25,000Resale of Van #1: +$17,500Cost of Van #2: -$25,000Resale of Van #2: +17,500Net taxable income: $585,000Total Tax @30%: 175,500Net income after taxes: $409,500
Income: $600,000Cost of Van #1: -$25,000Resale of Van #1: +$11,500Net taxable income: $586.500
Total Tax @30%: 175,950Net income after taxes: $410,550
Rather than trade-in their used vehicle, some sell it to a friend or family member for a reduced price (again, more audit bait).
Over six years, at 15,000 miles, he could deduct $50,400 in automobile expenses. This would, however, have to cover his gasoline, repairs, registration, and the like. But the amount of deduction would not depend on the resale value of the van - or its purchase price. He could buy a used van and deduct it by mileage and get the same number as for a new van.