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U.S. Clean Fuel
Tax Deductions
You are allowed a limited deduction for the cost
of clean-fuel vehicle property and clean-fuel vehicle refueling property you
place in service during the tax year.
Clean-burning fuels:
The following are clean-burning fuels:
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Natural Gas
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Liquefied Natural Gas
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Liquefied Petroleum Gas
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Hydrogen
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Electricity
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Any other fuel that is at least 85% alcohol
(any kind) or ether
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(Your engine must be totally
powered by this Fuel. HHO is not powering your engine; it is aiding
clean combustion of your existing fuel).
Deduction for Clean-Fuel
Vehicle Property.
The deduction for this property may be claimed regardless of whether the
property is used in a trade or business.
Clean-Fuel Vehicle
Property
Clean-Fuel Vehicle Property is either of the
following kinds of property.
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Any property installed on a motor vehicle
(including installation costs) to enable it to be propelled by a
clean-burning fuel.
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The property is an engine (or modification of
an engine) that can use a clean-burning fuel, or The Property is used to
store or deliver that fuel to the engine or to exhaust gases from the
combustion of that fuel.
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If HHO is not propelling the vehicle, then
it is not a fuel; it is a fuel additive, same as ethanol gasoline mix.
Making 100% Ethanol and using it as a fuel would qualify. Making and
using 100% HHO would qualify under Hydrogen.
For vehicles that may be propelled by both a
clean-burning fuel and any other fuel, your deduction is generally the
additional cost of permitting the use of the clean-burning fuel.
http://www.irs.gov/businesses/article/0,,id=175456,00.html
http://www.irs.gov/newsroom/article/0,,id=157557,00.html
http://www.irs.gov/irb/2006-26_IRB/ar13.html
http://www.irs.gov/irb/2007-23_IRB/ar08.html
http://www.irs.gov/businesses/corporations/article/0,,id=202341,00.html
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