2010 Luxury Auto Depreciation Limits, Tables and Explanations
Introduction
Before 1984, you could write off the entire cost of a vehicle over the course of three years, regardless of its cost.
In 1984, however, lawmakers believed that some business taxpayers were taking advantage of this rule, so they enacted the luxury auto limits, which continue to be in use today.1
Your business vehicle is going to fall into one of the following four categories:
Passenger auto subject to the luxury limits because it has a gross vehicle weight of 6,000 pounds or less;
Passenger auto exempt from the luxury limits because its gross vehicle weight is more than 6,000 pounds (almost no cars meet this curb-weight test);
Truck or van subject to the luxury limits because it has a gross vehicle weight rating (GVWR) of 6,000 pounds or less (GVWR is curb weight plus people and cargo; the people and cargo are fixed by the rules—you don’t get to pick your own); or
Truck or van not subject to the luxury limits because it has a GVWR of more than 6,000 pounds.
SUVs and crossover vehicles fall into either the auto or the truck category. The U.S. Department of Transportation sets the standards for classifying passenger autos, pickups, SUVs, and vans as either passenger autos or trucks.
Tax law takes the classifications a couple of steps further. New and used SUVs, crossover vehicles, pickup trucks, and vans with GVWRs greater than 6,000 pounds that are purchased and placed in service during 2010 can qualify for Section 179 expensing of up to,
$25,000 on qualifying SUVs or crossover vehicles, or
$250,000 on qualifying pickup trucks and vans.
Once your vehicle lands in this Section 179 expensing–eligible category, you get five-year MACRS depreciation with no luxury limits. In other words, you write off the entire cost or other basis of the vehicle, using the five-year MACRS depreciation table.
Tip. Open the driver door to locate the GVWR of your vehicle. Generally, there is a metal or paper tag with the GVWR information on either the door frame or the door itself.
If the Section 179 qualifying vehicle is new, you also qualify for 50 % bonus depreciation in the first year.
Example. To put this in perspective, assume that you spend $80,000 today on a 100 % business-use vehicle, and you want to deduct as much as possible this year. Your first-year deduction for both depreciation and expensing is
$80,000 on a Section 179 qualifying pickup truck;
$80,000 on a Section 179 qualifying van;
$58,000 on a Section 179 qualifying SUV or crossover vehicle;
$11,060 on a new car, SUV, or crossover vehicle classified as a car and not eligible for Section 179 expensing;
$3,060 on a used car, SUV, or crossover vehicle classified as a car and not eligible for Section 179 expensing;
$11,160 on a new SUV, crossover vehicle, pickup truck, or van classified as a truck but not eligible for Section 179 expensing; or
$3,160 on a used SUV, crossover vehicle, pickup truck, or van classified as a truck but not eligible for Section 179 expensing.
2010 Auto Depreciation Tables
There are limits on the amount you can deduct for depreciation of your car, truck or van. The section 179 deduction and special depreciation allowance are treated as depreciation for purposes of the limits. The maximum amount you can deduct each year depends on the year you place the car in service. The 2010 luxury vehicle tables appear below.2 The tables show
Limitations on depreciation deductions for owners of passenger autos, trucks and vans first placed in service by the taxpayer in 2010, and
The amounts to be included in income by lessees of passenger autos, trucks and vans first leased by the taxpayer in 2010.
To stay on top these and future tax law changes, we suggest that you read the monthly articles published online at the Bradford Tax Institute. We provide cutting-edge tax information for the self-employed, the one owner business, and the husband and wife owned business.
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TABLE 1 | |
Luxury Depreciation Limit for USED Passenger Autos (not Trucks or Vans) Placed in Service in Calendar Year 2010 | |
Tax Year | Amount |
1st Tax Year | $3,060 |
2nd Tax Year | $4,900 |
3rd Tax Year | $2,950 |
Each Succeeding Year | $1,775 |
TABLE 2 | |
Luxury Depreciation Limit for NEW Passenger Autos (not Trucks or Vans) Placed in Service in Calendar Year 2010 | |
Tax Year | Amount |
1st Tax Year | $11,060 |
2nd Tax Year | $4,900 |
3rd Tax Year | $2,950 |
Each Succeeding Year | $1,775 |
TABLE 3 | |
Luxury Depreciation Limit for USED Trucks and Vans Placed in Service in Calendar Year 2010 | |
Tax Year | Amount |
1st Tax Year | $3,160 |
2nd Tax Year | $5,100 |
3rd Tax Year | $3,050 |
Each Succeeding Year | $1,875 |
TABLE 4 | |
Luxury Depreciation Limit for NEW Trucks and Vans Placed in Service in Calendar Year 2010 | |
Tax Year | Amount |
1st Tax Year | $11,160 |
2nd Tax Year | $5,100 |
3rd Tax Year | $3,050 |
Each Succeeding Year | $1,875 |
TABLE 5 | ||||||
Dollar Amounts for Passenger Automobiles (not Trucks or Vans) with a Lease Term Beginning in Calendar Year 2010 | ||||||
Fair Market Value of Passenger Automobile | Tax Year During Lease | |||||
Over | Not Over | 1st | 2nd | 3rd | 4th | 5th & later |
$16,700 | $ 17,000 | 3 | 7 | 10 | 11 | 14 |
17,000 | 17,500 | 4 | 8 | 13 | 15 | 16 |
17,000 | 18,000 | 5 | 10 | 16 | 19 | 21 |
18,000 | 18,500 | 6 | 13 | 18 | 23 | 26 |
18,500 | 19,000 | 7 | 15 | 22 | 26 | 31 |
19,000 | 19,500 | 8 | 17 | 25 | 30 | 35 |
19,500 | 20,000 | 9 | 19 | 29 | 34 | 39 |
20,000 | 20,500 | 10 | 21 | 32 | 38 | 44 |
20,500 | 21,000 | 11 | 23 | 35 | 42 | 48 |
21,000 | 21,500 | 12 | 26 | 38 | 45 | 53 |
21,500 | 22,000 | 13 | 28 | 41 | 50 | 57 |
22,000 | 23,000 | 14 | 31 | 46 | 56 | 63 |
23,000 | 24,000 | 16 | 36 | 52 | 63 | 73 |
24,000 | 25,000 | 18 | 40 | 59 | 71 | 81 |
25,000 | 26,000 | 20 | 44 | 66 | 78 | 90 |
26,000 | 27,000 | 22 | 49 | 71 | 86 | 100 |
27,000 | 28,000 | 24 | 53 | 78 | 94 | 108 |
28,000 | 29,000 | 26 | 57 | 85 | 101 | 118 |
29,000 | 30,000 | 28 | 61 | 92 | 109 | 126 |
30,000 | 31,000 | 30 | 66 | 97 | 117 | 135 |
31,000 | 32,000 | 32 | 70 | 104 | 125 | 144 |
32,000 | 33,000 | 34 | 74 | 111 | 132 | 153 |
33,000 | 34,000 | 36 | 79 | 117 | 140 | 161 |
34,000 | 35,000 | 38 | 83 | 123 | 148 | 171 |
35,000 | 36,000 | 40 | 87 | 130 | 156 | 179 |
36,000 | 37,000 | 42 | 92 | 136 | 163 | 188 |
37,000 | 38,000 | 44 | 96 | 143 | 170 | 198 |
38,000 | 39,000 | 46 | 100 | 149 | 179 | 206 |
39,000 | 40,000 | 48 | 105 | 155 | 186 | 215 |
40,000 | 41,000 | 50 | 109 | 162 | 194 | 224 |
41,000 | 42,000 | 52 | 113 | 169 | 201 | 233 |
42,000 | 43,000 | 54 | 118 | 174 | 210 | 241 |
43,000 | 44,000 | 56 | 122 | 181 | 217 | 251 |
44,000 | 45,000 | 58 | 126 | 188 | 225 | 259 |
45,000 | 46,000 | 60 | 131 | 194 | 232 | 269 |
46,000 | 47,000 | 61 | 135 | 201 | 240 | 277 |
47,000 | 48,000 | 63 | 140 | 207 | 248 | 286 |
48,000 | 49,000 | 65 | 144 | 213 | 256 | 295 |
49,000 | 50,000 | 67 | 148 | 220 | 263 | 304 |
50,000 | 51,000 | 69 | 153 | 226 | 271 | 313 |
51,000 | 52,000 | 71 | 157 | 232 | 279 | 322 |
52,000 | 53,000 | 73 | 161 | 239 | 287 | 331 |
53,000 | 54,000 | 75 | 166 | 245 | 294 | 340 |
54,000 | 55,000 | 77 | 170 | 252 | 302 | 348 |
55,000 | 56,000 | 79 | 174 | 258 | 310 | 358 |
56,000 | 57,000 | 81 | 178 | 265 | 318 | 366 |
57,000 | 58,000 | 83 | 183 | 271 | 325 | 375 |
58,000 | 59,000 | 85 | 187 | 278 | 333 | 384 |
59,000 | 60,000 | 87 | 191 | 284 | 341 | 393 |
60,000 | 62,000 | 90 | 198 | 294 | 352 | 406 |
62,000 | 64,000 | 94 | 207 | 306 | 368 | 424 |
64,000 | 66,000 | 98 | 215 | 320 | 382 | 443 |
66,000 | 68,000 | 102 | 224 | 332 | 398 | 460 |
68,000 | 70,000 | 106 | 232 | 346 | 413 | 478 |
70,000 | 72,000 | 110 | 241 | 358 | 429 | 496 |
72,000 | 74,000 | 114 | 250 | 371 | 444 | 513 |
74,000 | 76,000 | 118 | 258 | 384 | 460 | 531 |
76,000 | 78,000 | 122 | 267 | 396 | 476 | 549 |
78,000 | 80,000 | 126 | 276 | 409 | 491 | 566 |
80,000 | 85,000 | 132 | 291 | 432 | 518 | 598 |
85,000 | 90,000 | 142 | 313 | 464 | 556 | 643 |
90,000 | 95,000 | 152 | 334 | 497 | 594 | 687 |
95,000 | 100,000 | 162 | 356 | 528 | 634 | 731 |
100,000 | 110,000 | 177 | 388 | 577 | 691 | 798 |
110,000 | 120,000 | 196 | 432 | 641 | 768 | 887 |
120,000 | 130,000 | 216 | 475 | 705 | 846 | 976 |
130,000 | 140,000 | 236 | 518 | 770 | 922 | 1,065 |
140,000 | 150,000 | 256 | 561 | 834 | 1,000 | 1,154 |
150,000 | 160,000 | 275 | 605 | 898 | 1,077 | 1,243 |
160,000 | 170,000 | 295 | 648 | 963 | 1,153 | 1,333 |
170,000 | 180,000 | 315 | 691 | 1,027 | 1,231 | 1,421 |
180,000 | 190,000 | 334 | 735 | 1,091 | 1,308 | 1,510 |
190,000 | 200,000 | 354 | 778 | 1,155 | 1,386 | 1,599 |
200,000 | 210,000 | 374 | 821 | 1,220 | 1,462 | 1,688 |
210,000 | 220,000 | 393 | 865 | 1,284 | 1,539 | 1,777 |
220,000 | 230,000 | 413 | 908 | 1,348 | 1,617 | 1,866 |
230,000 | 240,000 | 433 | 951 | 1,413 | 1,693 | 1,956 |
240,000 | and up | 453 | 995 | 1,476 | 1,771 | 2,044 |
TABLE 6 | ||||||
Dollar Amounts for Trucks and Vans with a Lease Term Beginning in Calendar Year 2010 | ||||||
Fair Market Value of Truck or Van | Tax Year During Lease | |||||
Over | Not Over | 1st | 2nd | 3rd | 4th | 5th & later |
17,000 | 17,500 | 3 | 6 | 9 | 10 | 11 |
17,500 | 18,000 | 4 | 8 | 12 | 14 | 16 |
18,000 | 18,500 | 5 | 10 | 15 | 18 | 21 |
18,500 | 19,000 | 6 | 12 | 19 | 22 | 24 |
19,000 | 19,500 | 7 | 15 | 21 | 26 | 29 |
19,500 | 20,000 | 8 | 17 | 25 | 29 | 34 |
20,000 | 20,500 | 9 | 19 | 28 | 33 | 38 |
20,500 | 21,000 | 10 | 21 | 31 | 37 | 43 |
21,000 | 21,500 | 11 | 23 | 35 | 41 | 47 |
21,500 | 22,000 | 12 | 25 | 38 | 45 | 51 |
22,000 | 23,000 | 13 | 29 | 42 | 51 | 58 |
23,000 | 24,000 | 15 | 33 | 49 | 58 | 67 |
24,000 | 25,000 | 17 | 37 | 56 | 66 | 76 |
25,000 | 26,000 | 19 | 42 | 62 | 73 | 85 |
26,000 | 27,000 | 21 | 46 | 68 | 82 | 93 |
27,000 | 28,000 | 23 | 50 | 75 | 89 | 103 |
28,000 | 29,000 | 25 | 55 | 81 | 97 | 111 |
29,000 | 30,000 | 27 | 59 | 88 | 104 | 121 |
30,000 | 31,000 | 29 | 63 | 94 | 113 | 129 |
31,000 | 32,000 | 31 | 68 | 100 | 120 | 138 |
32,000 | 33,000 | 33 | 72 | 107 | 127 | 148 |
33,000 | 34,000 | 35 | 76 | 114 | 135 | 156 |
34,000 | 35,000 | 37 | 81 | 119 | 143 | 165 |
35,000 | 36,000 | 39 | 85 | 126 | 151 | 174 |
36,000 | 37,000 | 41 | 89 | 133 | 158 | 183 |
37,000 | 38,000 | 43 | 94 | 139 | 166 | 191 |
38,000 | 39,000 | 45 | 98 | 145 | 174 | 201 |
39,000 | 40,000 | 47 | 102 | 152 | 182 | 209 |
40,000 | 41,000 | 49 | 106 | 159 | 189 | 218 |
41,000 | 42,000 | 51 | 111 | 164 | 198 | 227 |
42,000 | 43,000 | 53 | 115 | 171 | 205 | 236 |
43,000 | 44,000 | 55 | 119 | 178 | 213 | 245 |
44,000 | 45,000 | 57 | 124 | 184 | 220 | 254 |
45,000 | 46,000 | 59 | 128 | 190 | 228 | 263 |
46,000 | 47,000 | 60 | 133 | 197 | 235 | 272 |
47,000 | 48,000 | 62 | 137 | 203 | 244 | 280 |
48,000 | 49,000 | 64 | 142 | 209 | 251 | 290 |
49,000 | 50,000 | 66 | 146 | 216 | 259 | 298 |
50,000 | 51,000 | 68 | 150 | 223 | 266 | 308 |
51,000 | 52,000 | 70 | 154 | 229 | 275 | 316 |
52,000 | 53,000 | 72 | 159 | 235 | 282 | 325 |
53,000 | 54,000 | 74 | 163 | 242 | 290 | 334 |
54,000 | 55,000 | 76 | 167 | 249 | 297 | 343 |
55,000 | 56,000 | 78 | 172 | 254 | 305 | 352 |
56,000 | 57,000 | 80 | 176 | 261 | 313 | 361 |
57,000 | 58,000 | 82 | 180 | 268 | 320 | 370 |
58,000 | 59,000 | 84 | 185 | 274 | 328 | 378 |
59,000 | 60,000 | 86 | 189 | 280 | 336 | 388 |
60,000 | 62,000 | 89 | 195 | 291 | 347 | 401 |
62,000 | 64,000 | 93 | 204 | 303 | 363 | 418 |
64,000 | 66,000 | 97 | 213 | 315 | 379 | 436 |
66,000 | 68,000 | 101 | 221 | 329 | 394 | 454 |
68,000 | 70,000 | 105 | 230 | 341 | 410 | 472 |
70,000 | 72,000 | 109 | 239 | 354 | 424 | 490 |
72,000 | 74,000 | 113 | 247 | 367 | 440 | 508 |
74,000 | 76,000 | 117 | 256 | 380 | 455 | 526 |
76,000 | 78,000 | 121 | 264 | 393 | 471 | 543 |
78,000 | 80,000 | 125 | 273 | 406 | 486 | 561 |
80,000 | 85,000 | 131 | 289 | 428 | 513 | 592 |
85,000 | 90,000 | 141 | 310 | 461 | 552 | 636 |
90,000 | 95,000 | 151 | 332 | 492 | 591 | 681 |
95,000 | 100,000 | 161 | 353 | 525 | 629 | 726 |
100,000 | 110,000 | 176 | 386 | 573 | 686 | 793 |
110,000 | 120,000 | 195 | 430 | 637 | 763 | 882 |
120,000 | 130,000 | 215 | 473 | 701 | 841 | 971 |
130,000 | 140,000 | 235 | 516 | 766 | 918 | 1,059 |
140,000 | 150,000 | 255 | 559 | 830 | 995 | 1,149 |
150,000 | 160,000 | 274 | 603 | 894 | 1,072 | 1,238 |
160,000 | 170,000 | 294 | 646 | 958 | 1,150 | 1,326 |
170,000 | 180,000 | 314 | 689 | 1,023 | 1,226 | 1,416 |
180,000 | 190,000 | 333 | 733 | 1,087 | 1,303 | 1,505 |
190,000 | 200,000 | 353 | 776 | 1,151 | 1,381 | 1,594 |
200,000 | 210,000 | 373 | 819 | 1,216 | 1,457 | 1,683 |
210,000 | 220,000 | 392 | 863 | 1,280 | 1,534 | 1,772 |
220,000 | 230,000 | 412 | 906 | 1,344 | 1,612 | 1,861 |
230,000 | 240,000 | 432 | 949 | 1,409 | 1,689 | 1,949 |
240,000 | 250,000 | 452 | 992 | 1,473 | 1,766 | 2,039 |
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2 The IRS released tables 1, 3, 5 and 6 in Rev. Proc. 2010-18 on February 16, 2010. Tables 2 and 4 reflect bonus depreciation pursuant to H.R. 5297, signed into law September, 2010.
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