Depreciation

I've always depriciated otr trucks over 5 years.

 

I used accelerated depreciation. 50% the first year, the remaining balance spread over the next four years.

 

Yes, you can't depreciate it unless you own it. I think the first year you can depreciate what ever amount you want, check with an accountant and I'm sure they can point you in the right direction.

 

As a rule, it's 20% a year, on a depreciating scale.
So year one on a 100k truck would be 20k in depreciation.
Year two would be 20% of 80k, and so on.
I always do mine as a lease purchase though, as it works better for me over the course of the lease agreement.
Martin

 

Over the road tractors are depreciated over a life of 3 years per publication 946.


http://www.irs.gov/publications/p946/ch04.html#d0e4318


They are also eligible for Section 179 deduction.

 

True. Most truck equipment depreciation has been done over a 3 year calculated amount, but actually in 4 tax years. i.e. One would divide the amount to be depreciated by 3. And one of those 3 periods, divide in half. So one would typically take that amount the first year, followed by 1/3 for each of two years, and the final half of that first third on the 4th year. But, it is also true, that the tax law for the last few years has allowed larger amounts to be depreciated the 1st year. For tax year 2012, up to $500,000 or the amount that would not take you into a negative net category, could be deducted the first year. That is the Section 179 deduction in a nutshell. So, theoretically, one could deduct the entire cost of the truck the first year if the revenue/net numbers allowed it. Haven't seen the 2013 guidelines yet.