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LUXURY: $14,800 USED, $18,267 new

March 05, 2008

The IRS has released (Rev. Proc. 2008-22) the depreciation limits for autos purchased in 2008 under the so-called "luxury auto" rules of Section 280F. Luxury is cheaper this year.

There are two laps of luxury for 2008 as a result of the "stimulus" package. If the auto qualifies for "bonus" depreciation, the limits kick in for cars at prices starting at $18,267. That would normally be business-use new cars. Used equipment doesn't qualify for bonus depreciation, and the limits start affecting depreciation at $14,800 - a decline from the $15,300 threshold that applied last year.

$14,800 will get you a lovely 2007 Monte Carlo:

The new limits:

MAXIMUM ANNUAL DEPRECIATION, PASSENGER AUTOMOBILES QUALIFYING FOR BONUS DEPRECIATION:

Year 1..................$10,960
Year 2....................4,800
Year 3....................2,850
Year 4 and after..........1,775

MAXIMUM ANNUAL DEPRECIATION, PASSENGER AUTOMOBILES NOT QUALIFYING FOR BONUS DEPRECIATION

Year 1...................$2,960
Year 2....................4,800
Year 3....................2,850
Year 4 and after..........1,775

MAXIMUM ANNUAL DEPRECIATION, TRUCKS AND VANS

Year 1...................$3,160
Year 2....................5,100
Year 3....................3,050
Year 4 and after..........1,875

Tags: Depreciation.stimulus.

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