To amend the Internal Revenue Code of 1986 to provide for special rules allowing taxpayers to deduct qualified passenger vehicle loan interest paid or accrued during the taxable year on certain indebtedness, and for other purposes.
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed House
- Passed Senate
- To President
- Became Law
Overview
This bill amends the Internal Revenue Code to allow taxpayers to deduct interest paid on loans used to purchase qualified passenger vehicles. Specifically, it creates a special rule for taxable years 2024 through 2028, excluding vehicle loan interest from the definition of ‘personal interest.’ Deductions are capped at $10,000 annually and are reduced based on modified adjusted gross income, with a limit of $200 per $1,000 of income exceeding $100,000. The bill also introduces reporting requirements for businesses receiving vehicle loan interest from individuals.
Key provisions
- Excludes qualified passenger vehicle loan interest from the definition of ‘personal interest’ for tax years 2024-2028.
- Limits qualified passenger vehicle loan interest deduction to $10,000 annually.
- Reduces the deduction based on modified adjusted gross income, with a $200 per $1,000 income limit.
- Defines ‘qualified passenger vehicle loan interest’ as interest on loans for first-lien purchases of specific vehicles.
- Excludes certain types of loans, such as those for fleet sales, personal cash loans, commercial vehicle loans, and leases.
- Introduces reporting requirements for businesses receiving vehicle loan interest from individuals.
- Allows refinancing of vehicle loans to be included in the deduction.
- Excludes indebtedness owed to related parties.
Who is affected
- Taxpayers
- Businesses
- Individuals
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