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Luxury auto tax assumptions

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Select any of the following links for information on luxury auto tax assumptions.
Luxury autos (passenger)
  • In the case of section 179 property that's 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 1st year, the application adjusts the section 179 amount.
  • If MACRS tables are being used, the 6th year limits depreciation to the lesser of 5.76% or the proper 6th year limited amount.
Luxury auto (passenger), listed property disposal
When a luxury auto or listed property is sold or is a casualty/theft loss that's 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's replaced, the
Adjusted basis of old asset
 field on the
Disposal
 tab reflects the cost of the asset less the actual depreciation taken. It doesn’t adjust for the percentage of business use.

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