Question

What is the current IRS guidance for automobile depreciation? Assume you could buy any car for your business (no car is too expensive for you), what car would you buy, and how would you calculate your depreciation expense?

Answer 1

1. This year’s guidance includes figures for vehicles that are placed in service in 2017 and to which first-year bonus depreciation applies. For passenger automobiles (other than trucks or vans) placed in service during calendar year 2018, the depreciation limit under Sec. 280F(d)(7) is $11,160 for the first tax year, including bonus depreciation, and $3,160 if bonus depreciation does not apply.

For trucks and vans, the limit is $11,560 for the first tax year if bonus depreciation applies and $3,560 if it does not apply.

For passenger automobiles, the limits are $5,100 for the second tax year, $3,050 for the third tax year, and $1,875 for each successive tax year.

For trucks and vans, the limits are $5,700 for the second tax year, $3,450 for the third tax year, and $2,075 for each successive tax year.

I would have given a chace for purchase, will go for Aston Martin One-77 Cost is-$1.6M.

Depreciation Calculation (including Bonus Depreciation) Year Depreciable Amount 1st year 11160 2nd year 5100 3rd year 3050 4th year on wards 1875 Hope this helps! Please add comment if needs any clarifiaction.