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business vehicle depreciation
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Beachkids5
Level 3
05-05-2024
03:56 PM
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I entered a business vehicle on 2012 Schedule C (car and truck worksheet) with 5 year recovery period but system continues to depreciate after 11 years. Why?
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TaxGuyBill
Level 15
05-05-2024
04:55 PM
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The Luxury Limits only allow a certain amount of depreciation for vehicle under 6000 pounds, so the five year Recovery Period can be extended much further (although they significantly increased the limits a few years ago, so it is less common now).
https://www.irs.gov/pub/irs-prior/p463--2012.pdf#page=21
PATAX
Level 15
05-05-2024
05:04 PM
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Take a look at section 280F depreciation limits also known as Luxury Auto limits. Per quickfinder depreciation book, when depreciation is limited due to the section 280F limits, a vehicle will have unrecovered basis at the end of the recovery period. This basis can be depreciated until the car's full depreciable basis is recovered (assuming the vehicle continues to be used for business..... you can read the rest for yourself in the depreciation quickfinder handbook. It is great.
