Washington (August 13, 2002) -- The Internal Revenue Service has certified the first hybrid gas-electric automobile as being eligible for the clean-burning fuel deduction.Purchasers of a new Toyota Prius for model years 2001, 2002 and 2003 will be able to claim a deduction of $2,000 for the year that the vehicle was first put into use.

Under the law, $2,000 is the maximum amount of the one-time deduction, which must be taken in the year the vehicle was first used. Individuals take this benefit as an adjustment to income. They do not have to itemize deductions on their tax returns to claim it. Taxpayers may claim the deduction for a past year by filing an amended return.

The amount of the deduction for the Prius was set after Toyota documented for the IRS the incremental cost related to the vehicle’s electric motor and related equipment. Toyota Motor Sales, U.S.A., submitted the information to the IRS under Revenue Procedure 2002-42, which was issued in May.

-- Electronic Accountant Newswire staff

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access