If the luxury vehicle depreciation limits apply to your vehicle, you need to pay attention to your back end. Why? Your back end might have a big basis.

First, if own your business vehicle, realize that you have a back end. Your back end might be large. It might be small. But you have a back end when you deduct your vehicle by using Section 179 expensing, bonus depreciation, or IRS mileage rates.

Let’s examine a back end to see how the rules work.

Say you purchase a 7 Series BMW today for $80,000. You claim 100 percent business use for the next seven years and sell this vehicle in March of its eighth year. How big is your back-end basis ... Log in to view full article.