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Post Date:  3/29/2017
Last Updated:  3/29/2017

Summary
Cross References - Rev. Proc. 2017-29 - IRC §280F When the actual expense method is used for deducting the business use of a vehicle, the cost of the vehicle is depreciated under MACRS using a 5-year recovery period. The Section 179 deduction is also allowed for business vehicles. The annual deduction for depreciation, including any Section 179 deduction or special depreciation allowance, is limited to statutory amounts. The limits are adjusted each year for inflation.

The annual deduction is the lesser of:
- The vehicle’s basis multiplied by the business use percentage multiplied by the applicable depreciation percentage, or
- The section 280F limit multiplied by the business percentage.

The chart below reflects the new section 280F limits for 2017 in comparison to previous years.

Vehicle Depreciation Limitations (Section 280F)

Tax year first placed in service: 2017 2016 2015 2014
Auto depreciation limitations based on 100% business or investment use:
  1st year if special depreciation is claimed $11,160 $11,160 $11,160 $11,160
  1st year depreciation $3,160 $3,160 $3,160 $3,160
  2nd year depreciation $5,100 $5,100 $5,100 $5,100
  3rd year depreciation $3,050 $3,050 $3,050 $3,050
  Each succeeding year $1,875 $1,875 $1,875 $1,875
Trucks and vans depreciation limitations based on 100% business or investment use
  1st year if special depreciation is claimed $11,560 $11,560 $11,460 $11,460
  1st year depreciation $3,560 $3,560 $3,460 $3,460
  2nd year depreciation $5,700 $5,700 $5,600 $5,500
  3rd year depreciation $3,450 $3,350 $3,350 $3,350
  Each succeeding year $2,075 $2,075 $1,975 $1,975

Notes: If business or investment use is less than 100%, the depreciation limit equals the amount listed above multiplied by the business or investment percentage.

The 50% and 100% special depreciation allowance does not apply to section 280F property. Instead, the section 280F limits are increased by $8,000 for the first year. The increased amount is then phased down to $6,400 for new property in 2018 and $4,800 for new property in 2019.

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