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IRS announces 2011 vehicle depreciation limits without settling "year 2" problem in 100% bonus years.

March 02, 2011

The IRS yesterday issued (Rev. Proc. 2011-21) the maximum vehicle depreciation limits under the so-called "luxury auto" rules of Section 280F. The guidance pointedly leaves open the treatment of vehicles eligible for 100% bonus depreciation in years 2-6 of their depreciation life:

The Service intends to issue additional guidance addressing the interaction between the 100 percent additional first year depreciation deduction and § 280F(a) for the taxable years subsequent to the first taxable year.

The IRS may decide that the year 2-6 limits for such vehicles will be...zero.

For autos qualifying for bonus depreciation placed in service in 2011, the limits are:


Year 1............. $11,060
Year 2............. $4,900
Year 3...............$2,950
Year 4 and beyond: $1,775


For vehicles not subject to bonus depreciation, the limits are:


Year 1.............. $3,060
Year 2............. $4,900
Year 3...............$2,950
Year 4 and beyond: $1,775

For light trucks and vans, the limits are:


Year 1............ $11,260 ($3,260 without bonus)
Year 2............. $5,200
Year 3...............$3,150
Year 4 and beyond: $1,875

But vans and light trucks may also be subject to a year 2-6 "zero" limit.

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Comments

I purchesed a new 2011 chevy traverse in nov 2011 for around $29,000.00 with taxes,etc. I used it 100% for my busines until the end of the year. Can I write off the entire $29,000.00 in this year's taxes? If not, how much can I write off?

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