Does a G-Wagon Qualify for Section 179 Deduction?

A Mercedes-Benz G-Wagon qualifies for the Section 179 deduction because its gross vehicle weight rating exceeds 6,000 pounds, placing it in the heavy SUV category the tax code treats more like business equipment than a passenger car. For tax years beginning in 2026, a business owner can immediately expense up to $32,000 of the purchase price under Section 179, then apply 100 percent bonus depreciation to the remaining basis — often writing off the full cost in the first year. The vehicle must be used more than 50 percent for business, and the deduction is prorated to that business use percentage.

Why the G-Wagon Qualifies

The tax code splits vehicles at a 6,000-pound gross vehicle weight rating. Anything at or below that figure is a passenger automobile, and Section 280F caps its first-year depreciation at a small fraction of cost.¹ Vehicles rated above 6,000 pounds and up to 14,000 pounds are heavy SUVs, which sidestep those caps and open the door to Section 179 expensing.²

The 2026 Mercedes-Benz G550 has a gross vehicle weight rating of 7,055 pounds. The AMG G63 is in a similar range. Both sit comfortably above the threshold.

The 2026 Section 179 Cap Is $32,000

Heavy SUVs have their own dollar ceiling under Section 179, lower than the general equipment limit. For tax years beginning in 2026, that ceiling is $32,000.³ The cap exists because SUVs like the G-Wagon are built to carry passengers rather than cargo.

A narrow set of vehicles escapes the SUV cap — those with a cargo bed of at least six feet not accessible from the passenger compartment, or those with no seating behind the driver and an enclosed cargo area.² The G-Wagon meets none of these in its standard configuration, so the $32,000 cap applies.

Bonus Depreciation Covers the Rest

After the Section 179 deduction, the remaining cost basis is eligible for bonus depreciation under Section 168(k). For vehicles acquired after January 19, 2025, the One, Big, Beautiful Bill Act restored bonus depreciation to 100 percent, replacing the earlier phasedown.⁴⁵

To lock in the 100 percent rate under the current statute, the G-Wagon must be placed in service before January 1, 2027.⁴

How the Two Deductions Stack

Combining Section 179 with bonus depreciation is where the full write-off comes from. Assume a $160,000 G-Wagon placed in service in 2026 and used 100 percent for business:

Section 179 deduction: $32,000
Remaining cost basis: $128,000
Bonus depreciation at 100 percent: $128,000
Total first-year deduction: $160,000

At 80 percent business use, the total deduction drops proportionally to $128,000, and the 20 percent personal-use share is never deductible.

Business Use Must Exceed 50 Percent

The G-Wagon has to be used more than 50 percent of the time for business to qualify for Section 179.² At exactly 50 percent or less, both Section 179 and bonus depreciation are off the table. The deduction is then scaled by your business use percentage: 75 percent business use yields 75 percent of the otherwise allowable amount.

Commuting between home and a regular workplace is not business use. Only trips with a direct business purpose count.⁶ And the more-than-50-percent threshold has to hold across the vehicle’s five-year recovery period, not just year one.

New, Used, Trade-Ins, and Leases

Both new and pre-owned G-Wagons qualify, provided the vehicle is new to your business and acquired by purchase.² It cannot be bought from a related party (a spouse, a business entity you control) or received by inheritance. A certified pre-owned model from a dealership is fine.

Trade-ins complicate things. The portion of the new vehicle’s basis that carries over from the traded-in vehicle is not eligible for Section 179.² If you trade in a vehicle with a $30,000 adjusted basis and add $120,000 in cash, only the $120,000 is Section 179 eligible.

Leasing generally does not qualify, because Section 179 requires a purchase. A standard operating lease is treated as a rental. A capital lease structured to transfer ownership may be treated differently, and the specific terms need a tax professional’s review.

Recapture if Business Use Drops

A big upfront deduction carries a five-year string. If business use falls to 50 percent or less in any year during the recovery period, you have to recapture part of the Section 179 deduction as ordinary income.⁷ The calculation runs through Form 4797, and the income lands on the same schedule where you originally claimed the deduction, typically Schedule C for sole proprietors.⁸ If you take the full write-off, plan to keep the vehicle in business service through the end of that period.

Records You Have to Keep

Vehicles are listed property, and the IRS wants contemporaneous documentation — logs kept as trips happen, not reconstructed at year-end.⁷ For each year you depreciate the G-Wagon, keep:

Total miles driven, including personal trips
Business miles, excluding commuting
The date the vehicle was placed in service
Purchase price, including trade-in amounts and fees
A brief business purpose noted for each business trip

Business use percentage is business miles divided by total miles. A mileage app that captures date, destination, and purpose meets the requirement. Retain purchase agreements, financing documents, and logs for at least seven years, since listed property draws closer audit scrutiny than ordinary equipment.

How to File

Both the Section 179 deduction and bonus depreciation are reported on IRS Form 4562, which captures cost, elected Section 179 amount, bonus depreciation, and business use percentage.⁹ Form 4562 attaches to your business return:

Sole proprietors attach it to Schedule C (Form 1040)
C corporations attach it to Form 1120
S corporations and partnerships file Form 4562 at the entity level, but the Section 179 deduction passes through to shareholders or partners on Schedule K-1 rather than being claimed by the entity¹⁰

1
Office of the Law Revision Counsel. 26 U.S. Code 280F – Limitation on Depreciation for Luxury Automobiles
2
Office of the Law Revision Counsel. 26 U.S. Code 179 – Election to Expense Certain Depreciable Business Assets
3
Internal Revenue Service. Revenue Procedure 2025-32 – Inflation Adjusted Items for 2026
4
Office of the Law Revision Counsel. 26 U.S. Code 168 – Accelerated Cost Recovery System
5
Internal Revenue Service. One, Big, Beautiful Bill Provisions
6
Internal Revenue Service. Publication 463 – Travel, Gift, and Car Expenses
7
Internal Revenue Service. Instructions for Form 4562 – Depreciation and Amortization
8
Internal Revenue Service. Instructions for Form 4797 – Sales of Business Property
9
Internal Revenue Service. About Form 4562 – Depreciation and Amortization
10
Internal Revenue Service. 2025 Instructions for Form 4562 – Depreciation and Amortization