The IRS has released the new 2011 luxury auto limits on depreciation.1 Here is how the luxury limits work:

On a new passenger auto placed in service in 2011, the law limits your depreciation deduction to no more than

$11,060 in 2011;

$4,900 in 2012;

$2,950 in 2013; and

$1,775 each year thereafter.

Example. You place a $40,000 car in service on May 17, 2011. With 100 percent business use, these are your deductions:

$11,060 in 2011

$4,900 in 2012

$2,950 in 2013

$1,775 in years 2014 ... Log in to view full article.