@joemarteau wrote:
In addition, I used the 200% DB-HY method indicated on my 2023 form 4562, which I understand typically accelerates depreciation. Thus, with $49,771 remaining as my depreciable basis, shouldn't my deduction for 2024 be closer to or hit the $19,500 cap? Not $3,185?
Due to the maximum limits for a vehicle and a weird portion of that law, it doesn't work like that.
You took $20,200 of Section 179. That leaves your depreciable Basis at $49,771.
Because you did NOT elect OUT of the 80% Bonus depreciation and you have already maxxed-out your first year of depreciation, the weird portion of the law says that 80% of the $49,771 can't be used until year SEVEN (yes, year seven).
That leaves you with 20% of $49,771, or $9954.
Year two of depreciation is 32%. So 32% of $9954 is $3185.
Unfortunately, due to that weird portion of the law, not electing out of Bonus Depreciation in 2023 for a vehicle under 6000 pounds results in lower-than-expected depreciation in years 2 through 6.
