Luxury auto

Alerts and notices

See also: Depreciation tax assumptions

Click any of the following links for information on luxury auto tax assumptions.

  • In the case of section 179 property that is also coded as listed property or a luxury auto, the current depreciation calculation is made using the IRS tables instead of the formulas in the IRC. During the recovery period, the remaining basis of these assets reflects the cost of the asset adjusted by the percentage of business use, less actual depreciation taken. If you enter a section 179 expense that exceeds the limit in the first year, the application adjusts the section 179 amount.
  • If MACRS tables are being used, the sixth year limits depreciation to the lesser of 5.76 percent or the appropriate sixth year limited amount.

When a luxury auto or listed property is sold or is a casualty/theft loss that is not replaced, the Cost/basis field on the Disposal tab reflects the cost of the asset adjusted for the business use. The depreciation allowed or allowable is the actual prior depreciation.

When a luxury auto or listed property is traded or is a casualty/theft loss that is replaced, the Adjusted basis of old asset field on the Disposal tab reflects the cost of the asset less actual depreciation taken. It does not adjust for the percentage of business use.

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