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Safe Harbor Rule for Autos that Claim Bonus Depreciation

February 27, 2019


The IRS has issued guidance (IRS Revenue Procedure 2019-13) that provides a safe harbor method for determining depreciation deductions for autos that claim 100-percent bonus depreciation for 2018 – 2022.

The safe harbor method allows the remaining basis of the auto (after the $18,000 bonus depreciation is taken) to be depreciated using the applicable depreciation table in Appendix A of IRS Publication 946 (How to Depreciate Property) for each subsequent year.

IRS Rev. Proc. 2019-13 provides examples of how the safe harbor rule works beginning on page 7.

A taxpayer adopts the safe harbor method by applying it to deduct depreciation of an auto on their return beginning in the second year the auto is used.

For more details IRS News Release IR-2019-14 - IRS Provides Safe Harbor Method of Accounting for passenger automobiles that qualify for the 100-percent additional first year depreciation

Recent Tax Updates

2019 Federal Tax Changes
April 24, 2019

When a Rental Activity Can Be Included as Qualified Business Income
March 19, 2019

Safe Harbor Rule for Autos that Claim Bonus Depreciation
February 27, 2019

2018 Federal Return and Taxpayer Expectations
January 30, 2019

Reminder of 2018 Itemized Deduction Changes
January 16, 2019

Qualified Business Income Deduction (20% Deduction for Certain Pass-Through Income)
January 9, 2019

Additional Updates
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