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LOW-COST LUXURY

October 03, 2003

The IRS has issued (Rev. Proc. 2003-75) the official 2003 depreciation limits for passenger automobiles. The so-called "luxury" car limits kick in for 2003 vehicles costing over $15,300.

For cars placed in service in 2003 not using the "bonus" depreciation - used cars, for example - the annual depreciation limits are:

1st Tax Year.................$3,060
2nd Tax Year................$4,900
3rd Tax Year................$2,950
Each Succeeding Year...$1,775

For cars using 30% bonus depreciation - the maximum available for cars placed in service before May 5, 2003 - the limits are as follows:

1st Tax Year.................$7,660
2nd Tax Year................$4,900
3rd Tax Year................$2,950
Each Succeeding Year...$1,775

The limits for cars using 50% depreciation are:

1st Tax Year...............$10,710
2nd Tax Year................$4,900
3rd Tax Year................$2,950
Each Succeeding Year...$1,775

Taxpayers can circumvent these limits by exclusively using fine vehicles like this:

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