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Drive away in luxury for $14,800

April 10, 2009

The IRS has issued (Rev. Proc. 2009-24) the maximum depreciation allowances for autos and trucks under the Sec. 280A "luxury auto" rules. Luxury is a bargain; the limits affect cars costing over $14,800. That means this fine Chevy Cobalt, listed for $14,998, is luxurious.

If you don't take bonus depreciation (and you can't for used vehicles), the annual depreciation limits are:

   1st Tax Year                    $ 2,960
   2nd Tax Year                   $ 4,800
   3rd Tax Year                    $ 2,850
   Each Succeeding Year     $ 1,775

If you buy a new car and take the 50% bonus depreciation, the limits are:

   1st Tax Year                   $ 10,960  
   2nd Tax Year                   $  4,800
   3rd Tax Year                   $  2,850
   Each Succeeding Year    $  1,775

You can find the 2008 figures here.

The truck and van limits are in the extended entry below.

Trucks with no bonus depreciation

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

Trucks with Bonus Depreciation:

   1st Tax Year                   $ 11,060  
   2nd Tax Year                   $  4,900
   3rd Tax Year                   $  2,950
   Each Succeeding Year    $  1,775

Tags: Depreciation.Sec. 280A.