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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

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