@markorec wrote:
Why is second year with bonus taken in first year only $2,790?
My first thought that seems too HIGH. But there are some variables and I may be doing the order of the math calculations slightly differently than the program when doing 80% business use.
This involves a weird, little-known rule that is going to surprise a lot of people this year (including many tax professionals).
For simplicity, my explanation will assume 100% business use (not your 80%).
You purchased a vehicle for $54,500. The 80% Bonus depreciation is $43,600. Plus 'regular' depreciation on other 20% could be roughly $2180 (depending on circumstances and options). For a total depreciation of $45,780. However, the vehicle limits only allows $20,200 of that $45,780. The remaining $25,580 ($45,780 minus $20,200) can't be used until year SEVEN. Yes, year seven. It is weird.
That means years two through six will only use the remaining amount of $8720 ($54,500 minus $45,780) for depreciation during years two through six.
