2013 Depreciation Limits for Business Autos, Light Trucks, and Vans

March 5, 2013

 

Today we will take a look at the 2013 depreciation limits for business autos, light trucks, and vans.

 

The IRS released the inflation-adjusted depreciation limits for these vehicles (which also includes minivans) placed in service by the taxpayer in 2013.

 

Depreciation deduction limits for 2013 are the same as in 2012 for a passenger auto. The limits are $100 higher for a light truck or van, other than the first year limits, which are the same.

 

First-year luxury auto dollar limits are enhanced for new vehicles bought and placed in service in 2013 and otherwise eligible for bonus depreciation.

 

Under the American Taxpayer Relief Act of 2012, new assets generally acquired and placed in service after December 31, 2007 and before January 1, 2014 are eligible for 50% bonus first-year depreciation.

 

Unless a taxpayer elects out, the regular first-year dollar limit for eligible vehicles bought and placed in service in 2013 is increased by $8,000. This is for autos, light duty trucks or vans that are subject to the luxury-auto limits and are qualified property under the bonus depreciation rules.

 

Below are the year by year limits for business vehicle depreciation for vehicles placed in service in calendar year 2013. There are four methods depending on type of vehicle and whether bonus depreciation is taken or not.

 

  1. If the bonus first year depreciation rules don't apply to an auto (not a truck or van)

      First placed in service year — $3,160
      Second year — $5,100
      Third year — $3,050
      Each succeeding year — $1,875

 

2. If the bonus depreciation rules do apply to an auto (not a truck or van)

      First placed in service year — $11,160
      Second year — $5,100
      Third year — $3,050
      Each succeeding year — $1,875

 

3. If the bonus depreciation rules don't apply to a light truck or van (passenger auto built on a truck chassis, including minivan and SUV built on a truck chassis)

      First placed in service year — $3,360
      Second year — $5,400 
      Third year — $3,250 
      Each succeeding year — $1,975

 

4. If the bonus depreciation rules do apply to a light truck or van

      First placed in service year — $11,360
      Second year — $5,400
      Third year — $3,250 
      Fourth year — $1,975

 

Heavy SUVs are those that are built on a truck chassis and are rated at more than six-thousand

pounds gross loaded vehicle weight. They are exempt from the luxury-auto dollar caps because they fall outside of the definition of a passenger auto.

 

 

Disclaimer: The items included in the Tax Tip Tuesday Video Blog are informational only and are not meant as tax advice. Consult with your tax advisor to determine how any item applies to your situation. IRS Circular 230 disclosure: To ensure compliance with requirements imposed by the IRS, we inform you that any U.S. federal tax advise contained in this communication (including any attachments) is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties under the Internal Revenue Code or (ii) promoting, marketing or recommending to another party any transaction or matter addressed herein.

 

 

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