@100 CHAP ZZ 旼컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴커 쿟AX CREDITS/DEDUCTIONS FOR CLEAN-FUEL VEHICLES� 읕컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴컴켸 The Energy Policy Act of 1992 wrote into law some new tax incentives to purchase clean-fuel vehicles, starting on July 1, 1993. DEDUCTIONS FOR PURCHASE OR CONVERSION TO CLEAN-FUEL VEHICLE. The new law provides deductions on such vehicles as follows: . For vehicles that were originally manufactured to run on clean fuel, the deduction applies to the cost of the engine, fuel storage tank and the delivery and exhaust systems. . For vehicles converted to run on clean fuel, the deduc- tion is allowed for the cost of conversion. The deduction for cars is limited to $2,000, while a larger deduction of $5,000 is allowed for trucks of between 10,000 and 26,000 pounds gross weight. For larger trucks (over 26,000 pounds) and for busses seating 20 or more adults, the deduction can be as much as $50,000 of the qualifying costs. It is not necessary that the vehicle that is purchased or converted be used in a trade or business. A personal-use vehicle can also qualify for the deduction. In addition, note that the deduction reduces adjusted gross income, which means that it will not be reduced by either: (a) the 2% of income floor that applies to certain miscellaneous itemized deductions or the overall limitation (phase-out) of itemized deductions for taxpayers with incomes above certain levels. For purposes of this deduction, clean-fuel vehicles must satisfy federal and state emissions standards and use clean- burning fuels, such as natural gas, liquified natural or petroleum gas, electricity, or fuels containing at least 85% alcohol (methanol or ethanol) or ether. 10% TAX CREDIT ON ELECTRIC POWERED VEHICLES. For electric vehicles, a tax CREDIT equal to the lesser of $4,000 or 10% of the cost of the vehicle is allowed. However, the clean- fuel vehicle deduction described above is not allowed on any such electric vehicle on which this tax credit is claimed.