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Amended Tax Return

Irs Form1040ez2011 Income TaxesFile My Federal And State Taxes For FreeIrs Ez Form 2011Free 2011 Tax FormsHow To File An Amended Tax Return For 2012Federal Tax Return Forms2012 Irs Tax Forms 1040aHow To Amend My 2011 TaxesIrs Free Tax FilingE-file State Return OnlyCan I Efile My 2011 Taxes In 2013Can You File 2011 Taxes With 2012Irs Tax Forms 1040ezIrs Form 1040x 2013Do My Taxes Free OnlineIrs Form 1040 EzAmend 2010 Tax Return TurbotaxWww Irs Gov FileHow To File An Amended Tax Return For 2012Cheapest State Tax ReturnTax Form 1040xFree Online State Tax FilingFile 2009 Tax Return Turbotax2012 Tax FormsInstructions For Filing An Amended Tax Return1040 Ez OnlineH&r Block Free File Tax Return2010 1040 EzMilitary Tax DeductionsFree State Tax EfilingTurbo TaxNj 1040nr 2011Amendments1040ez WorksheetFree H&r Block Tax1040ez Tax Forms And InstructionsFiling A Tax Return OnlineCan I File A Amended Tax Return OnlineWww Hrblock Com

Amended Tax Return

Amended tax return Index A Adoption Child tax credit, Adopted child. Amended tax return (see also Child tax credit) Afghanistan, Afghanistan area. Amended tax return Aliens, Alien Status Amount of exclusion, Amount of Exclusion Arabian peninsula, Arabian peninsula. Amended tax return Assistance (see Tax help) C Child tax credit, Child Tax Credit Limits Modified adjusted gross income, Modified AGI. Amended tax return Qualifying child, Qualifying Child Child, qualifying, Qualifying child. Amended tax return Claims for tax forgiveness, Claims for Tax Forgiveness Codes, W-2, Form W-2 Codes Combat zone Election to include pay for earned income credit, Nontaxable combat pay election. Amended tax return Exclusion, Combat Zone Exclusion Extension of deadlines, Service That Qualifies for an Extension of Deadline Related forgiveness, Combat Zone Related Forgiveness Community property, Community Property, Residents of community property states. Amended tax return Contingency operation, Service That Qualifies for an Extension of Deadline Credits Child tax, Child Tax Credit Earned income, Earned Income Credit Excess social security tax withheld, Credit for Excess Social Security Tax Withheld First-time homebuyer, First-Time Homebuyer Credit D Decedents, Forgiveness of Decedent's Tax Liability Deductions, itemized, Itemized Deductions Domicile, Domicile. Amended tax return Dual-status aliens, Dual-Status Aliens E Earned income credit, Earned Income Credit Social security card, Social security number. Amended tax return Social security number, Social security number. Amended tax return Educational expenses, Educational Expenses Employee business expenses, Employee Business Expenses Excess social security tax withholding credit, Credit for Excess Social Security Tax Withheld Excess withholding credit How to take, How to take the credit. Amended tax return Expenses Employee business, Employee Business Expenses Moving, Moving Expenses Extension of deadlines, Extension of Deadlines Extension of time to file, Extensions F Family, Adopted child. Amended tax return (see also Child tax credit) Filing returns, Filing Returns First-time homebuyer credit, First-Time Homebuyer Credit Foreclosures Mortgage settlement payouts, Foreclosures Foreign income, Foreign Source Income Foreign moves, Foreign Moves Forms 1040, Foreign Moves, Itemized Deductions, Where To File 1040A, Where To File 1040EZ, Where To File 1040NR, Nonresident Aliens 2106, Employee Business Expenses, Reimbursement. Amended tax return 2106-EZ, Employee Business Expenses 2848, Signing Returns, Spouse overseas. Amended tax return 3903, Moving Expenses 4868, Extensions W-2, Form W-2 Codes, Form W-2. Amended tax return , Nontaxable combat pay election. Amended tax return Foster care Child tax credit, Qualifying Child Free tax services, Free help with your tax return. Amended tax return G Gross income, Gross Income H Help (see Tax help) Home Away from, Away from home. Amended tax return Definition of, Away from home. Amended tax return Sale of, Sale of Home Homebuyer credit, First-Time Homebuyer Credit Hospitalization, Hospitalized While Serving in a Combat Zone, Hospitalized After Leaving a Combat Zone, Qualified hospitalization. Amended tax return I Income Foreign source, Foreign Source Income Gross, Gross Income Individual retirement arrangements, Individual Retirement Arrangements Installment agreement Payment deferment, Request for deferment. Amended tax return Interest rate (maximum), Maximum Rate of Interest Iraq, Arabian peninsula. Amended tax return Itemized deductions, Itemized Deductions J Joint returns, Joint returns. Amended tax return , Joint returns. Amended tax return , Joint returns. Amended tax return K Kosovo, The Kosovo area. Amended tax return M Military action related forgiveness, Terrorist or Military Action Related Forgiveness Military Spouses Residency Relief Act Domicile, Military Spouses Residency Relief Act (MSRRA) Miscellaneous itemized deductions, Employee Business Expenses Missing status, Missing status. Amended tax return , Spouse in missing status. Amended tax return , Missing status. Amended tax return Modified adjusted gross income (MAGI) Child tax credit limits, Modified AGI. Amended tax return Moving expenses, Moving Expenses N Nonresident aliens, Nonresident Aliens P Permanent change of station, Permanent change of station. Amended tax return Personal representative, Forgiveness of Decedent's Tax Liability Power of attorney, Signing Returns Professional dues, Professional Dues Publications (see Tax help) Q Qualifying child, Qualifying child. Amended tax return R Reimbursements Employee business expenses, Reimbursement. Amended tax return Moving and storage, Services or reimbursements provided by the government. Amended tax return Uniforms, Uniforms Reservists, Armed Forces reservists. Amended tax return Travel, Armed Forces Reservists Uniforms, Uniforms Resident aliens, Resident Aliens Returns Filing, Filing Returns Signing, Signing Returns S Sale of home, Sale of Home Same-sex marriage, Same-Sex Marriage SCRA violation payouts, Foreclosures Separate returns, Separate returns. Amended tax return Servicemembers Civil Relief Act, Maximum Rate of Interest Serving in a combat zone, Serving in a Combat Zone Social security numbers (SSNs) Earned income credit, Residency test. Amended tax return Spouse Deadline extension, Spouses. Amended tax return Died, Spouse died during the year. Amended tax return Incapacitated, Spouse incapacitated. Amended tax return Missing, Spouse in missing status. Amended tax return Nonresident alien, Treating nonresident alien spouse as resident alien. Amended tax return Overseas, Spouse overseas. Amended tax return State bonus payments, State bonus payments. Amended tax return T Tax forgiven, Combat Zone Related Forgiveness Tax help, How To Get Tax Help Temporary work location, Temporary work location. Amended tax return Terrorist related forgiveness, Terrorist or Military Action Related Forgiveness Transportation, Armed Forces reservists. Amended tax return Transportation expenses, Transportation Expenses Travel expenses, Travel Expenses TTY/TDD information, How To Get Tax Help U Uniforms, Uniforms W When to file, When To File Where to file, Where To File Y Yugoslavia, The Kosovo area. Amended tax return Prev  Up     Home   More Online Publications
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Contact My Local Office Internationally

International Services

If you are a taxpayer who lives outside the United States, the IRS has full-time permanent staff in 4 U.S. embassies and consulates. These offices have tax forms and publications, can help you with account problems, and answer your questions about notices and bills. You can reach these offices at the following telephone numbers, which include country or city codes if you are outside the local dialing area.

Taxpayers with specific individual or business account questions should contact the International Taxpayer Service Call Center by phone or fax. The International Call Center is operational Monday through Friday, from 6:00 a.m. to 11:00 p.m. (Eastern Time):
Tel: 267-941-1000 (not toll-free)
Fax: 267-941-1055

If you are a tax professional or software provider calling about an e-file issue and it is not account related, please contact the e-help office in Austin at 512-416-7750 (not toll-free). Assistors are available Monday through Friday, from 7:00 a.m. to 6:00 p.m. (Central time).

City Address Phone/FAX
Frankfurt U. S. Consulate
Internal Revenue Service
Frankfurt
Giessener Str. 30
60435 Frankfurt am Main
Germany

Walk-in assistance by appointment only
Tuesdays 9:00 a.m.-12:30 p.m.
Call (49)(69) 7535-3811 to request an appointment.
 

Phone Service
Tel: [49] (69) 7535-3823 
Monday through Thursday
9:00 a.m.-12:30 p.m. and 1:30 p.m.-3:30 p.m.

London U. S. Embassy
London  
Internal Revenue Service
24/31 Grosvenor Square
London W1A 1AE  
United Kingdom
Walk-in assistance
Tuesday through Thursday
9:00 a.m.- 1:00 p.m. and 2:00 p.m. - 4:00 p.m.
 
Phone Service
Tel: [44] (207) 894-0477
Monday 9:00 a.m.-4:00 p.m.
Tuesday through Thursday 9:00 a.m.-12:00 noon.
Fax [44] (207) 495-4224
Paris U. S. Embassy Paris
Internal Revenue Service
2 Avenue Gabriel
75382 Paris Cedex 08 
France
Walk-in assistance 
Monday through Friday
9:00 a.m.- 12:00 noon

Phone Service
Tel: [33] (1) 4312-2555
Monday - Friday 9:00 a.m. - 12:00 noon and 1:30 p.m. - 3:30 p.m.
Fax: [33] (1) 4312-2303
E-mail: irs.paris@irs.gov
Beijing U.S. Embassy Beijing
Internal Revenue Service
No. 55 Anjialou Road,
Beijing 100600 
Peoples Republic of China
 

Walk-in assistance by appointment only.
Wednesdays 1:00 p.m.-4:00 p.m.
Call or e-mail to request an appointment.

 

Phone Service
Tel: [86] (10) 8531-3983
Fax: [86] (10) 8531-4287
E-mail: irs.beijing@irs.gov

Puerto Rico  

The IRS offices listed can answer your federal income tax questions, help with account and refund problems and assist with the preparation of current and prior year tax returns.

IRS trained volunteers are also available at some embassy/consulate locations. If you are interested in becoming a volunteer, please contact one of our IRS offices.

Individual taxpayers located outside the U.S. may also contact the IRS by mail at:

            Internal Revenue Service
            International Accounts
            Philadelphia, PA 19255-0725

Business taxpayers located outside the U.S. may also contact the IRS by mail at:

            Internal Revenue Service
            International Accounts         
            Ogden, UT 84201-0038

Residents of Puerto Rico and the U.S. Virgin Islands may contact the IRS toll free at 1-800-829-1040. (Hours of Operation are 7:00 a.m. to 10:00 p.m. Monday - Friday).

Other items of potential interest:

International Taxpayer Advocate:
To request Taxpayer Advocate help, call:

Worldwide: Puerto Rico office:
Tel: (Spanish) 787-622-8930, (English) 787-622-8940 
FAX: 787-622-8933
Page Last Reviewed or Updated: 17-Mar-2014

 

The Amended Tax Return

Amended tax return 5. Amended tax return   Additional Rules for Listed Property Table of Contents Introduction Useful Items - You may want to see: What Is Listed Property?Passenger Automobiles Other Property Used for Transportation Computers and Related Peripheral Equipment Can Employees Claim a Deduction? What Is the Business-Use Requirement?How To Allocate Use Qualified Business Use Recapture of Excess Depreciation Lessee's Inclusion Amount Do the Passenger Automobile Limits Apply?Maximum Depreciation Deduction Deductions After the Recovery Period Deductions For Passenger Automobiles Acquired in a Trade-in What Records Must Be Kept?Adequate Records How Is Listed Property Information Reported? Introduction This chapter discusses the deduction limits and other special rules that apply to certain listed property. Amended tax return Listed property includes cars and other property used for transportation, property used for entertainment, and certain computers. Amended tax return Deductions for listed property (other than certain leased property) are subject to the following special rules and limits. Amended tax return Deduction for employees. Amended tax return If your use of the property is not for your employer's convenience or is not required as a condition of your employment, you cannot deduct depreciation or rent expenses for your use of the property as an employee. Amended tax return Business-use requirement. Amended tax return If the property is not used predominantly (more than 50%) for qualified business use, you cannot claim the section 179 deduction or a special depreciation allowance. Amended tax return In addition, you must figure any depreciation deduction under the Modified Accelerated Cost Recovery System (MACRS) using the straight line method over the ADS recovery period. Amended tax return You may also have to recapture (include in income) any excess depreciation claimed in previous years. Amended tax return A similar inclusion amount applies to certain leased property. Amended tax return Passenger automobile limits and rules. Amended tax return Annual limits apply to depreciation deductions (including section 179 deductions and any special depreciation allowance) for certain passenger automobiles. Amended tax return You can continue to deduct depreciation for the unrecovered basis resulting from these limits after the end of the recovery period. Amended tax return This chapter defines listed property and explains the special rules and depreciation deduction limits that apply, including the special inclusion amount rule for leased property. Amended tax return It also discusses the recordkeeping rules for listed property and explains how to report information about the property on your tax return. Amended tax return Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 535 Business Expenses 587 Business Use of Your Home (Including Use by Daycare Providers) Form (and Instructions) 2106 Employee Business Expenses 2106-EZ Unreimbursed Employee Business Expenses 4562 Depreciation and Amortization 4797 Sales of Business Property See chapter 6 for information about getting publications and forms. Amended tax return What Is Listed Property? Listed property is any of the following. Amended tax return Passenger automobiles (as defined later). Amended tax return Any other property used for transportation, unless it is an excepted vehicle. Amended tax return Property generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video-recording equipment). Amended tax return Computers and related peripheral equipment, unless used only at a regular business establishment and owned or leased by the person operating the establishment. Amended tax return A regular business establishment includes a portion of a dwelling unit that is used both regularly and exclusively for business as discussed in Publication 587. Amended tax return Improvements to listed property. Amended tax return   An improvement made to listed property that must be capitalized is treated as a new item of depreciable property. Amended tax return The recovery period and method of depreciation that apply to the listed property as a whole also apply to the improvement. Amended tax return For example, if you must depreciate the listed property using the straight line method, you also must depreciate the improvement using the straight line method. Amended tax return Passenger Automobiles A passenger automobile is any four-wheeled vehicle made primarily for use on public streets, roads, and highways and rated at 6,000 pounds or less of unloaded gross vehicle weight (6,000 pounds or less of gross vehicle weight for trucks and vans). Amended tax return It includes any part, component, or other item physically attached to the automobile at the time of purchase or usually included in the purchase price of an automobile. Amended tax return The following vehicles are not considered passenger automobiles for these purposes. Amended tax return An ambulance, hearse, or combination ambulance-hearse used directly in a trade or business. Amended tax return A vehicle used directly in the trade or business of transporting persons or property for pay or hire. Amended tax return A truck or van that is a qualified nonpersonal use vehicle. Amended tax return Qualified nonpersonal use vehicles. Amended tax return   Qualified nonpersonal use vehicles are vehicles that by their nature are not likely to be used more than a minimal amount for personal purposes. Amended tax return They include the trucks and vans listed as excepted vehicles under Other Property Used for Transportation , next. Amended tax return They also include trucks and vans that have been specially modified so that they are not likely to be used more than a minimal amount for personal purposes, such as by installation of permanent shelving and painting the vehicle to display advertising or the company's name. Amended tax return For a detailed discussion of passenger automobiles, including leased passenger automobiles, see  Publication 463. Amended tax return Other Property Used for Transportation Although vehicles used to transport persons or property for pay or hire and vehicles rated at more than the 6,000-pound threshold are not passenger automobiles, they are still “other property used for transportation” and are subject to the special rules for listed property. Amended tax return Other property used for transportation includes trucks, buses, boats, airplanes, motorcycles, and any other vehicles used to transport persons or goods. Amended tax return Excepted vehicles. Amended tax return   Other property used for transportation does not include the following qualified nonpersonal use vehicles (defined earlier under Passenger Automobiles ). Amended tax return Clearly marked police and fire vehicles. Amended tax return Unmarked vehicles used by law enforcement officers if the use is officially authorized. Amended tax return Ambulances used as such and hearses used as such. Amended tax return Any vehicle with a loaded gross vehicle weight of over 14,000 pounds that is designed to carry cargo. Amended tax return Bucket trucks (cherry pickers), cement mixers, dump trucks (including garbage trucks), flatbed trucks, and refrigerated trucks. Amended tax return Combines, cranes and derricks, and forklifts. Amended tax return Delivery trucks with seating only for the driver, or only for the driver plus a folding jump seat. Amended tax return Qualified moving vans. Amended tax return Qualified specialized utility repair trucks. Amended tax return School buses used in transporting students and employees of schools. Amended tax return Other buses with a capacity of at least 20 passengers that are used as passenger buses. Amended tax return Tractors and other special purpose farm vehicles. Amended tax return Clearly marked police and fire vehicle. Amended tax return   A clearly marked police or fire vehicle is a vehicle that meets all the following requirements. Amended tax return It is owned or leased by a governmental unit or an agency or instrumentality of a governmental unit. Amended tax return It is required to be used for commuting by a police officer or fire fighter who, when not on a regular shift, is on call at all times. Amended tax return It is prohibited from being used for personal use (other than commuting) outside the limit of the police officer's arrest powers or the fire fighter's obligation to respond to an emergency. Amended tax return It is clearly marked with painted insignia or words that make it readily apparent that it is a police or fire vehicle. Amended tax return A marking on a license plate is not a clear marking for these purposes. Amended tax return Qualified moving van. Amended tax return   A qualified moving van is any truck or van used by a professional moving company for moving household or business goods if the following requirements are met. Amended tax return No personal use of the van is allowed other than for travel to and from a move site or for minor personal use, such as a stop for lunch on the way from one move site to another. Amended tax return Personal use for travel to and from a move site happens no more than five times a month on average. Amended tax return Personal use is limited to situations in which it is more convenient to the employer, because of the location of the employee's residence in relation to the location of the move site, for the van not to be returned to the employer's business location. Amended tax return Qualified specialized utility repair truck. Amended tax return   A truck is a qualified specialized utility repair truck if it is not a van or pickup truck and all the following apply. Amended tax return The truck was specifically designed for and is used to carry heavy tools, testing equipment, or parts. Amended tax return Shelves, racks, or other permanent interior construction has been installed to carry and store the tools, equipment, or parts and would make it unlikely that the truck would be used, other than minimally, for personal purposes. Amended tax return The employer requires the employee to drive the truck home in order to be able to respond in emergency situations for purposes of restoring or maintaining electricity, gas, telephone, water, sewer, or steam utility services. Amended tax return Computers and Related Peripheral Equipment A computer is a programmable, electronically activated device capable of accepting information, applying prescribed processes to the information, and supplying the results of those processes with or without human intervention. Amended tax return It consists of a central processing unit with extensive storage, logic, arithmetic, and control capabilities. Amended tax return Related peripheral equipment is any auxiliary machine which is designed to be controlled by the central processing unit of a computer. Amended tax return The following are neither computers nor related peripheral equipment. Amended tax return Any equipment that is an integral part of other property that is not a computer. Amended tax return Typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment. Amended tax return Equipment of a kind used primarily for the user's amusement or entertainment, such as video games. Amended tax return Can Employees Claim a Deduction? If you are an employee, you can claim a depreciation deduction for the use of your listed property (whether owned or rented) in performing services as an employee only if your use is a business use. Amended tax return The use of your property in performing services as an employee is a business use only if both the following requirements are met. Amended tax return The use is for your employer's convenience. Amended tax return The use is required as a condition of your employment. Amended tax return If these requirements are not met, you cannot deduct depreciation (including the section 179 deduction) or rent expenses for your use of the property as an employee. Amended tax return Employer's convenience. Amended tax return   Whether the use of listed property is for your employer's convenience must be determined from all the facts. Amended tax return The use is for your employer's convenience if it is for a substantial business reason of the employer. Amended tax return The use of listed property during your regular working hours to carry on your employer's business generally is for the employer's convenience. Amended tax return Condition of employment. Amended tax return   Whether the use of listed property is a condition of your employment depends on all the facts and circumstances. Amended tax return The use of property must be required for you to perform your duties properly. Amended tax return Your employer does not have to require explicitly that you use the property. Amended tax return However, a mere statement by the employer that the use of the property is a condition of your employment is not sufficient. Amended tax return Example 1. Amended tax return Virginia Sycamore is employed as a courier with We Deliver, which provides local courier services. Amended tax return She owns and uses a motorcycle to deliver packages to downtown offices. Amended tax return We Deliver explicitly requires all delivery persons to own a car or motorcycle for use in their employment. Amended tax return Virginia's use of the motorcycle is for the convenience of We Deliver and is required as a condition of employment. Amended tax return Example 2. Amended tax return Bill Nelson is an inspector for Uplift, a construction company with many sites in the local area. Amended tax return He must travel to these sites on a regular basis. Amended tax return Uplift does not furnish an automobile or explicitly require him to use his own automobile. Amended tax return However, it pays him for any costs he incurs in traveling to the various sites. Amended tax return The use of his own automobile or a rental automobile is for the convenience of Uplift and is required as a condition of employment. Amended tax return Example 3. Amended tax return Assume the same facts as in Example 2 except that Uplift furnishes a car to Bill, who chooses to use his own car and receive payment for using it. Amended tax return The use of his own car is neither for the convenience of Uplift nor required as a condition of employment. Amended tax return Example 4. Amended tax return Marilyn Lee is a pilot for Y Company, a small charter airline. Amended tax return Y requires pilots to obtain 80 hours of flight time annually in addition to flight time spent with the airline. Amended tax return Pilots usually can obtain these hours by flying with the Air Force Reserve or by flying part-time with another airline. Amended tax return Marilyn owns her own airplane. Amended tax return The use of her airplane to obtain the required flight hours is neither for the convenience of the employer nor required as a condition of employment. Amended tax return Example 5. Amended tax return David Rule is employed as an engineer with Zip, an engineering contracting firm. Amended tax return He occasionally takes work home at night rather than work late in the office. Amended tax return He owns and uses a home computer which is virtually identical to the office model. Amended tax return His use of the computer is neither for the convenience of his employer nor required as a condition of employment. Amended tax return What Is the Business-Use Requirement? You can claim the section 179 deduction and a special depreciation allowance for listed property and depreciate listed property using GDS and a declining balance method if the property meets the business-use requirement. Amended tax return To meet this requirement, listed property must be used predominantly (more than 50% of its total use) for qualified business use. Amended tax return If this requirement is not met, the following rules apply. Amended tax return Property not used predominantly for qualified business use during the year it is placed in service does not qualify for the section 179 deduction. Amended tax return Property not used predominantly for qualified business use during the year it is placed in service does not qualify for a special depreciation allowance. Amended tax return Any depreciation deduction under MACRS for property not used predominantly for qualified business use during any year must be figured using the straight line method over the ADS recovery period. Amended tax return This rule applies each year of the recovery period. Amended tax return Excess depreciation on property previously used predominantly for qualified business use must be recaptured (included in income) in the first year in which it is no longer used predominantly for qualified business use. Amended tax return A lessee must add an inclusion amount to income in the first year in which the leased property is not used predominantly for qualified business use. Amended tax return Being required to use the straight line method for an item of listed property not used predominantly for qualified business use is not the same as electing the straight line method. Amended tax return It does not mean that you have to use the straight line method for other property in the same class as the item of listed property. Amended tax return Exception for leased property. Amended tax return   The business-use requirement generally does not apply to any listed property leased or held for leasing by anyone regularly engaged in the business of leasing listed property. Amended tax return   You are considered regularly engaged in the business of leasing listed property only if you enter into contracts for the leasing of listed property with some frequency over a continuous period of time. Amended tax return This determination is made on the basis of the facts and circumstances in each case and takes into account the nature of your business in its entirety. Amended tax return Occasional or incidental leasing activity is insufficient. Amended tax return For example, if you lease only one passenger automobile during a tax year, you are not regularly engaged in the business of leasing automobiles. Amended tax return An employer who allows an employee to use the employer's property for personal purposes and charges the employee for the use is not regularly engaged in the business of leasing the property used by the employee. Amended tax return How To Allocate Use To determine whether the business-use requirement is met, you must allocate the use of any item of listed property used for more than one purpose during the year among its various uses. Amended tax return For passenger automobiles and other means of transportation, allocate the property's use on the basis of mileage. Amended tax return You determine the percentage of qualified business use by dividing the number of miles you drove the vehicle for business purposes during the year by the total number of miles you drove the vehicle for all purposes (including business miles) during the year. Amended tax return For other listed property, allocate the property's use on the basis of the most appropriate unit of time the property is actually used (rather than merely being available for use). Amended tax return For example, you can determine the percentage of business use of a computer by dividing the number of hours you used the computer for business purposes during the year by the total number of hours you used the computer for all purposes (including business use) during the year. Amended tax return Entertainment use. Amended tax return   Treat the use of listed property for entertainment, recreation, or amusement purposes as a business use only to the extent you can deduct expenses (other than interest and property tax expenses) due to its use as an ordinary and necessary business expense. Amended tax return Commuting use. Amended tax return   The use of an automobile for commuting is not business use, regardless of whether work is performed during the trip. Amended tax return For example, a business telephone call made on a car telephone while commuting to work does not change the character of the trip from commuting to business. Amended tax return This is also true for a business meeting held in a car while commuting to work. Amended tax return Similarly, a business call made on an otherwise personal trip does not change the character of a trip from personal to business. Amended tax return The fact that an automobile is used to display material that advertises the owner's or user's trade or business does not convert an otherwise personal use into business use. Amended tax return Use of your automobile by another person. Amended tax return   If someone else uses your automobile, do not treat that use as business use unless one of the following conditions applies. Amended tax return That use is directly connected with your business. Amended tax return You properly report the value of the use as income to the other person and withhold tax on the income where required. Amended tax return You are paid a fair market rent. Amended tax return Treat any payment to you for the use of the automobile as a rent payment for purposes of item (3). Amended tax return Employee deductions. Amended tax return   If you are an employee, do not treat your use of listed property as business use unless it is for your employer's convenience and is required as a condition of your employment. Amended tax return See Can Employees Claim a Deduction , earlier. Amended tax return Qualified Business Use Qualified business use of listed property is any use of the property in your trade or business. Amended tax return However, it does not include the following uses. Amended tax return The leasing of property to any 5% owner or related person (to the extent the property is used by a 5% owner or person related to the owner or lessee of the property). Amended tax return The use of property as pay for the services of a 5% owner or related person. Amended tax return The use of property as pay for services of any person (other than a 5% owner or related person), unless the value of the use is included in that person's gross income and income tax is withheld on that amount where required. Amended tax return Property does not stop being used predominantly for qualified business use because of a transfer at death. Amended tax return Exception for leasing or compensatory use of aircraft. Amended tax return   Treat the leasing of any aircraft by a 5% owner or related person, or the compensatory use of any aircraft, as a qualified business use if at least 25% of the total use of the aircraft during the year is for a qualified business use. Amended tax return 5% owner. Amended tax return   For a business entity that is not a corporation, a 5% owner is any person who owns more than 5% of the capital or profits interest in the business. Amended tax return   For a corporation, a 5% owner is any person who owns, or is considered to own, either of the following. Amended tax return More than 5% of the outstanding stock of the corporation. Amended tax return Stock possessing more than 5% of the total combined voting power of all stock in the corporation. Amended tax return Related persons. Amended tax return   For a description of related persons, see Related persons in the discussion on property owned or used in 1986 under What Method Can You Use To Depreciate Your Property in chapter 1 . Amended tax return For this purpose, however, treat as related persons only the relationships listed in items (1) through (10) of that discussion and substitute “50%” for “10%” each place it appears. Amended tax return Examples. Amended tax return   The following examples illustrate whether the use of business property is qualified business use. Amended tax return Example 1. Amended tax return John Maple is the sole proprietor of a plumbing contracting business. Amended tax return John employs his brother, Richard, in the business. Amended tax return As part of Richard's pay, he is allowed to use one of the company automobiles for personal use. Amended tax return The company includes the value of the personal use of the automobile in Richard's gross income and properly withholds tax on it. Amended tax return The use of the automobile is pay for the performance of services by a related person, so it is not a qualified business use. Amended tax return Example 2. Amended tax return John, in Example 1, allows unrelated employees to use company automobiles for personal purposes. Amended tax return He does not include the value of the personal use of the company automobiles as part of their compensation and he does not withhold tax on the value of the use of the automobiles. Amended tax return This use of company automobiles by employees is not a qualified business use. Amended tax return Example 3. Amended tax return James Company Inc. Amended tax return owns several automobiles that its employees use for business purposes. Amended tax return The employees also are allowed to take the automobiles home at night. Amended tax return The fair market value of each employee's use of an automobile for any personal purpose, such as commuting to and from work, is reported as income to the employee and James Company withholds tax on it. Amended tax return This use of company automobiles by employees, even for personal purposes, is a qualified business use for the company. Amended tax return Investment Use The use of property to produce income in a nonbusiness activity (investment use) is not a qualified business use. Amended tax return However, you can treat the investment use as business use to figure the depreciation deduction for the property in a given year. Amended tax return Example 1. Amended tax return Sarah Bradley uses a home computer 50% of the time to manage her investments. Amended tax return She also uses the computer 40% of the time in her part-time consumer research business. Amended tax return Sarah's home computer is listed property because it is not used at a regular business establishment. Amended tax return She does not use the computer predominantly for qualified business use. Amended tax return Therefore, she cannot elect a section 179 deduction or claim a special depreciation allowance for the computer. Amended tax return She must depreciate it using the straight line method over the ADS recovery period. Amended tax return Her combined business/investment use for determining her depreciation deduction is 90%. Amended tax return Example 2. Amended tax return If Sarah uses her computer 30% of the time to manage her investments and 60% of the time in her consumer research business, it is used predominantly for qualified business use. Amended tax return She can elect a section 179 deduction and, if she does not deduct all the computer's cost, she can claim a special depreciation allowance and depreciate the computer using the 200% declining balance method over the GDS recovery period. Amended tax return Her combined business/investment use for determining her depreciation deduction is 90%. Amended tax return Recapture of Excess Depreciation If you used listed property more than 50% in a qualified business use in the year you placed it in service, you must recapture (include in income) excess depreciation in the first year you use it 50% or less. Amended tax return You also increase the adjusted basis of your property by the same amount. Amended tax return Excess depreciation is: The depreciation allowable for the property (including any section 179 deduction and special depreciation allowance claimed) for years before the first year you do not use the property predominantly for qualified business use, minus The depreciation that would have been allowable for those years if you had not used the property predominantly for qualified business use in the year you placed it in service. Amended tax return To determine the amount in (2) above, you must refigure the depreciation using the straight line method and the ADS recovery period. Amended tax return Example. Amended tax return In June 2009, Ellen Rye purchased and placed in service a pickup truck that cost $18,000. Amended tax return She used it only for qualified business use for 2009 through 2012. Amended tax return Ellen claimed a section 179 deduction of $10,000 based on the purchase of the truck. Amended tax return She began depreciating it using the 200% DB method over a 5-year GDS recovery period. Amended tax return The pickup truck's gross vehicle weight was over 6,000 pounds, so it was not subject to the passenger automobile limits discussed later under Do the Passenger Automobile Limits Apply. Amended tax return During 2013, she used the truck 50% for business and 50% for personal purposes. Amended tax return She includes $4,018 excess depreciation in her gross income for 2013. Amended tax return The excess depreciation is determined as follows. Amended tax return Total section 179 deduction ($10,000) and depreciation claimed ($6,618) for 2009 through 2012. Amended tax return (Depreciation is from Table A-1. Amended tax return ) $16,618 Minus: Depreciation allowable (Table A-8):     2009 – 10% of $18,000 $1,800   2010 – 20% of $18,000 3,600   2011 – 20% of $18,000 3,600   2012 – 20% of $18,000 3,600 12,600 Excess depreciation $4,018 If Ellen's use of the truck does not change to 50% for business and 50% for personal purposes until 2015, there will be no excess depreciation. Amended tax return The total depreciation allowable using Table A-8 through 2015 will be $18,000, which equals the total of the section 179 deduction and depreciation she will have claimed. Amended tax return Where to figure and report recapture. Amended tax return   Use Form 4797, Part IV, to figure the recapture amount. Amended tax return Report the recapture amount as other income on the same form or schedule on which you took the depreciation deduction. Amended tax return For example, report the recapture amount as other income on Schedule C (Form 1040) if you took the depreciation deduction on Schedule C. Amended tax return If you took the depreciation deduction on Form 2106, report the recapture amount as other income on Form 1040, line 21. Amended tax return Lessee's Inclusion Amount If you use leased listed property other than a passenger automobile for business/investment use, you must include an amount in your income in the first year your qualified business-use percentage is 50% or less. Amended tax return Your qualified business-use percentage is the part of the property's total use that is qualified business use (defined earlier). Amended tax return For the inclusion amount rules for a leased passenger automobile, see Leasing a Car in chapter 4 of Publication 463. Amended tax return The inclusion amount is the sum of Amount A and Amount B, described next. Amended tax return However, see the special rules for the inclusion amount, later, if your lease begins in the last 9 months of your tax year or is for less than one year. Amended tax return Amount A. Amended tax return   Amount A is: The fair market value of the property, multiplied by The business/investment use for the first tax year the qualified business-use percentage is 50% or less, multiplied by The applicable percentage from Table A-19 in Appendix A . Amended tax return   The fair market value of the property is the value on the first day of the lease term. Amended tax return If the capitalized cost of an item of listed property is specified in the lease agreement, you must treat that amount as the fair market value. Amended tax return Amount B. Amended tax return   Amount B is: The fair market value of the property, multiplied by The average of the business/investment use for all tax years the property was leased that precede the first tax year the qualified business-use percentage is 50% or less, multiplied by The applicable percentage from Table A–20 in Appendix A . Amended tax return Maximum inclusion amount. Amended tax return   The inclusion amount cannot be more than the sum of the deductible amounts of rent for the tax year in which the lessee must include the amount in gross income. Amended tax return Inclusion amount worksheet. Amended tax return   The following worksheet is provided to help you figure the inclusion amount for leased listed property. Amended tax return Inclusion Amount Worksheet for Leased Listed Property 1. Amended tax return Fair market value   2. Amended tax return Business/investment use for first year business use is 50% or less   3. Amended tax return Multiply line 1 by line 2. Amended tax return   4. Amended tax return Rate (%) from Table A-19   5. Amended tax return Multiply line 3 by line 4. Amended tax return This is Amount A. Amended tax return   6. Amended tax return Fair market value   7. Amended tax return Average business/investment use for years property leased before the first year business use is 50% or less . Amended tax return . Amended tax return . Amended tax return . Amended tax return . Amended tax return . Amended tax return . Amended tax return . Amended tax return . Amended tax return . Amended tax return . Amended tax return . Amended tax return . Amended tax return   8. Amended tax return Multiply line 6 by line 7   9. Amended tax return Rate (%) from Table A-20   10. Amended tax return Multiply line 8 by line 9. Amended tax return This is Amount B. Amended tax return   11. Amended tax return Add line 5 and line 10. Amended tax return This is your inclusion amount. Amended tax return Enter here and as other income on the form or schedule on which you originally took the deduction (for example, Schedule C or F (Form 1040), Form 1040, Form 1120, etc. Amended tax return )         Example. Amended tax return On February 1, 2011, Larry House, a calendar year taxpayer, leased and placed in service a computer with a fair market value of $3,000. Amended tax return The lease is for a period of 5 years. Amended tax return Larry does not use the computer at a regular business establishment, so it is listed property. Amended tax return His business use of the property (all of which is qualified business use) is 80% in 2011, 60% in 2012, and 40% in 2013. Amended tax return He must add an inclusion amount to gross income for 2013, the first tax year his qualified business-use percentage is 50% or less. Amended tax return The computer has a 5-year recovery period under both GDS and ADS. Amended tax return 2013 is the third tax year of the lease, so the applicable percentage from Table A-19 is −19. Amended tax return 8%. Amended tax return The applicable percentage from Table A-20 is 22. Amended tax return 0%. Amended tax return Larry's deductible rent for the computer for 2013 is $800. Amended tax return Larry uses the Inclusion amount worksheet. Amended tax return to figure the amount he must include in income for 2013. Amended tax return His inclusion amount is $224, which is the sum of −$238 (Amount A) and $462 (Amount B). Amended tax return Inclusion Amount Worksheet for Leased Listed Property 1. Amended tax return Fair market value $3,000   2. Amended tax return Business/investment use for first year business use is 50% or less 40 % 3. Amended tax return Multiply line 1 by line 2. Amended tax return 1,200   4. Amended tax return Rate (%) from Table A-19 −19. Amended tax return 8 % 5. Amended tax return Multiply line 3 by line 4. Amended tax return This is Amount A. Amended tax return −238   6. Amended tax return Fair market value 3,000   7. Amended tax return Average business/investment use for years property leased before the first year business use is 50% or less 70 % 8. Amended tax return Multiply line 6 by line 7 2,100   9. Amended tax return Rate (%) from Table A-20 22. Amended tax return 0 % 10. Amended tax return Multiply line 8 by line 9. Amended tax return This is Amount B. Amended tax return 462   11. Amended tax return Add line 5 and line 10. Amended tax return This is your inclusion amount. Amended tax return Enter here and as other income on the form or schedule on which you originally took the deduction (for example, Schedule C or F (Form 1040), Form 1040, Form 1120, etc. Amended tax return ) $224           Lease beginning in the last 9 months of your tax year. Amended tax return    The inclusion amount is subject to a special rule if all the following apply. Amended tax return The lease term begins within 9 months before the close of your tax year. Amended tax return You do not use the property predominantly (more than 50%) for qualified business use during that part of the tax year. Amended tax return The lease term continues into your next tax year. Amended tax return Under this special rule, add the inclusion amount to income in the next tax year. Amended tax return Figure the inclusion amount by taking into account the average of the business/investment use for both tax years (line 2 of the Inclusion Amount Worksheet for Leased Listed Property) and the applicable percentage for the tax year the lease term begins. Amended tax return Skip lines 6 through 9 of the worksheet and enter zero on line 10. Amended tax return Example 1. Amended tax return On August 1, 2012, Julie Rule, a calendar year taxpayer, leased and placed in service an item of listed property. Amended tax return The property is 5-year property with a fair market value of $10,000. Amended tax return Her property has a recovery period of 5 years under ADS. Amended tax return The lease is for 5 years. Amended tax return Her business use of the property was 50% in 2012 and 90% in 2013. Amended tax return She paid rent of $3,600 for 2012, of which $3,240 is deductible. Amended tax return She must include $147 in income in 2013. Amended tax return The $147 is the sum of Amount A and Amount B. Amended tax return Amount A is $147 ($10,000 × 70% × 2. Amended tax return 1%), the product of the fair market value, the average business use for 2012 and 2013, and the applicable percentage for year one from Table A-19 . Amended tax return Amount B is zero. Amended tax return Lease for less than one year. Amended tax return   A special rule for the inclusion amount applies if the lease term is less than one year and you do not use the property predominantly (more than 50%) for qualified business use. Amended tax return The amount included in income is the inclusion amount (figured as described in the preceding discussions) multiplied by a fraction. Amended tax return The numerator of the fraction is the number of days in the lease term and the denominator is 365 (or 366 for leap years). Amended tax return   The lease term for listed property other than residential rental or nonresidential real property includes options to renew. Amended tax return If you have two or more successive leases that are part of the same transaction (or a series of related transactions) for the same or substantially similar property, treat them as one lease. Amended tax return Example 2. Amended tax return On October 1, 2012, John Joyce, a calendar year taxpayer, leased and placed in service an item of listed property that is 3-year property. Amended tax return This property had a fair market value of $15,000 and a recovery period of 5 years under ADS. Amended tax return The lease term was 6 months (ending on March 31, 2013), during which he used the property 45% in business. Amended tax return He must include $71 in income in 2013. Amended tax return The $71 is the sum of Amount A and Amount B. Amended tax return Amount A is $71 ($15,000 × 45% × 2. Amended tax return 1% × 183/365), the product of the fair market value, the average business use for both years, and the applicable percentage for year one from Table A-19 , prorated for the length of the lease. Amended tax return Amount B is zero. Amended tax return Where to report inclusion amount. Amended tax return   Report the inclusion amount figured as described in the preceding discussions as other income on the same form or schedule on which you took the deduction for your rental costs. Amended tax return For example, report the inclusion amount as other income on Schedule C (Form 1040) if you took the deduction on Schedule C. Amended tax return If you took the deduction for rental costs on Form 2106, report the inclusion amount as other income on Form 1040, line 21. Amended tax return Do the Passenger Automobile Limits Apply? The depreciation deduction, including the section 179 deduction and special depreciation allowance, you can claim for a passenger automobile (defined earlier) each year is limited. Amended tax return This section describes the maximum depreciation deduction amounts for 2013 and explains how to deduct, after the recovery period, the unrecovered basis of your property that results from applying the passenger automobile limit. Amended tax return Exception for leased cars. Amended tax return   The passenger automobile limits generally do not apply to passenger automobiles leased or held for leasing by anyone regularly engaged in the business of leasing passenger automobiles. Amended tax return For information on when you are considered regularly engaged in the business of leasing listed property, including passenger automobiles, see Exception for leased property , earlier, under What Is the Business-Use Requirement . Amended tax return Maximum Depreciation Deduction The passenger automobile limits are the maximum depreciation amounts you can deduct for a passenger automobile. Amended tax return They are based on the date you placed the automobile in service. Amended tax return Passenger Automobiles The maximum deduction amounts for most passenger automobiles are shown in the following table. Amended tax return Maximum Depreciation Deduction for Passenger Automobiles Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,1601 $5,100 $3,050 $1,875 2012 11,1601 5,100 3,050 1,875 2011 11,0602 4,900 2,950 1,775 2010 11,0602  4,900 2,950 1,775 2009 10,9603 4,800 2,850 1,775 2008 10,9603  4,800 2,850 1,775 2007 3,060 4,900 2,850 1,775 2006 2,960 4,800 2,850 1,775 2005 2,960 4,700 2,850 1,675 2004 10,6104 4,800 2,850 1,675 5/06/2003– 12/31/2003 10,7105 4,900 2,950 1,775 1/01/2003– 5/05/2003 7,6606 4,900 2,950 1,775 1If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. Amended tax return 2If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,060. Amended tax return 3If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $2,960. Amended tax return 4If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $2,960. Amended tax return 5If you acquired the vehicle before 5/06/03, the maximum deduction is $7,660. Amended tax return If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,060. Amended tax return 6If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,060. Amended tax return If your business/investment use of the automobile is less than 100%, you must reduce the maximum deduction amount by multiplying the maximum amount by the percentage of business/investment use determined on an annual basis during the tax year. Amended tax return If you have a short tax year, you must reduce the maximum deduction amount by multiplying the maximum amount by a fraction. Amended tax return The numerator of the fraction is the number of months and partial months in the short tax year and the denominator is 12. Amended tax return Example. Amended tax return On April 15, 2013, Virginia Hart bought and placed in service a new car for $14,500. Amended tax return She used the car only in her business. Amended tax return She files her tax return based on the calendar year. Amended tax return She does not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. Amended tax return Under MACRS, a car is 5-year property. Amended tax return Since she placed her car in service on April 15 and used it only for business, she uses the percentages in Table A-1 to figure her MACRS depreciation on the car. Amended tax return Virginia multiplies the $14,500 unadjusted basis of her car by 0. Amended tax return 20 to get her MACRS depreciation of $2,900 for 2013. Amended tax return This $2,900 is below the maximum depreciation deduction of $3,160 for passenger automobiles placed in service in 2013. Amended tax return She can deduct the full $2,900. Amended tax return Electric Vehicles The maximum depreciation deductions for passenger automobiles that are produced to run primarily on electricity are higher than those for other automobiles. Amended tax return The maximum deduction amounts for electric vehicles placed in service after August 5, 1997, and before January 1, 2007, are shown in the following table. Amended tax return Owners of electric vehicles placed in service after December 31, 2006, should use the table of maximum deduction amounts later for electric vehicles classified as passenger automobiles or use the table of maximum deduction amounts for trucks and vans later, for electric vehicles classified as trucks and vans. Amended tax return Maximum Depreciation Deduction For Electric Vehicles Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2006 $8,980 $14,400 $8,650 $5,225 2005 8,880 14,200 8,450 5,125 2004 31,8301 14,300 8,550 5,125 5/06/2003– 12/31/2003 32,0302 14,600 8,750 5,225 1/01/2003– 5/05/2003 22,8803 14,600 8,750 5,225 1If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $8,880. Amended tax return 2If you acquired the vehicle before 5/06/03, the maximum deduction is $22,880. Amended tax return If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $9,080. Amended tax return 3 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $9,080. Amended tax return Trucks and Vans The maximum depreciation deductions for trucks and vans placed in service after 2002 are higher than those for other passenger automobiles. Amended tax return The maximum deduction amounts for trucks and vans are shown in the following table. Amended tax return Maximum Depreciation Deduction For Trucks and Vans Date       4th & Placed 1st 2nd 3rd Later In Service Year Year Year Years 2013 $11,3601 $5,400 $3,250 $1,975 2012 11,3601 5,300 3,150 1,875 2011 11,2602 5,200 3,150 1,875 2010 11,1603 5,100 3,050 1,875 2009 11,0604 4,900 2,950 1,775 2008 11,1605 5,100 3,050 1,875 2007 3,260 5,200 3,050 1,875 2006 3,260 5,200 3,150 1,875 2005 3,260 5,200 3,150 1,875 2004 10,9106 5,300 3,150 1,875 5/06/2003– 12/31/2003 11,0107 5,400 3,250 1,975 1/01/2003– 5/05/2003 7,9608 5,400 3,250 1,975 1 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,360. Amended tax return 2 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,260. Amended tax return 3 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. Amended tax return 4 If you elect not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $3,060. Amended tax return 5If you elected not to claim any special depreciation allowance for the vehicle or the vehicle is not qualified property, the maximum deduction is $3,160. Amended tax return 6If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, or the maximum deduction is $3,260. Amended tax return 7 If you acquired the vehicle before 5/06/03, the maximum deduction is $7,960. Amended tax return If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,360. Amended tax return 8 If you elected not to claim any special depreciation allowance for the vehicle, the vehicle is not qualified property, or the vehicle is qualified Liberty Zone property, the maximum deduction is $3,360. Amended tax return Depreciation Worksheet for Passenger Automobiles You can use the following worksheet to figure your depreciation deduction using the percentage tables. Amended tax return Then use the information from this worksheet to prepare Form 4562. Amended tax return Depreciation Worksheet for Passenger Automobiles   Part I   1. Amended tax return MACRS system (GDS or ADS)     2. Amended tax return Property class     3. Amended tax return Date placed in service     4. Amended tax return Recovery period     5. Amended tax return Method and convention     6. Amended tax return Depreciation rate (from tables)     7. Amended tax return Maximum depreciation deduction for this year from the appropriate table       8. Amended tax return Business/investment-use percentage       9. Amended tax return Multiply line 7 by line 8. Amended tax return This is your adjusted maximum depreciation deduction       10. Amended tax return Section 179 deduction claimed this year (not more than line 9). Amended tax return Enter -0- if this is not the year you placed the car in service. Amended tax return         Note. Amended tax return  1) If line 10 is equal to line 9, stop here. Amended tax return Your combined section 179 and depreciation deduction (including your special depreciation allowance) is limited to the amount on line 9. Amended tax return  2) If line 10 is less than line 9, complete Part II. Amended tax return   Part II   11. Amended tax return Subtract line 10 from line 9. Amended tax return This is the limit on the amount you can deduct for depreciation (including any special depreciation allowance )       12. Amended tax return Cost or other basis (reduced by any alternative motor vehicle credit 1or credit for electric vehicles 2)       13. Amended tax return Multiply line 12 by line 8. Amended tax return This is your business/investment cost       14. Amended tax return Section 179 deduction claimed in the year you placed the car in service       15. Amended tax return Subtract line 14 from line 13. Amended tax return This is your tentative basis for depreciation       16. Amended tax return Multiply line 15 by . Amended tax return 50 if the 50% special depreciation allowance applies. Amended tax return This is your special depreciation allowance. Amended tax return Enter -0- if this is not the year you placed the car in service, the car is not qualified property, or you elected not to claim a special depreciation allowance       Note 1) If line 16 is equal to line 11, stop here. Amended tax return Your depreciation deduction (including your special depreciation allowance) is limited to the amount on line 11. Amended tax return  2) If line 16 is less than line 11, complete Part III. Amended tax return   Part III   17. Amended tax return Subtract line 16 from 11. Amended tax return This is the limit on the amount you can deduct for MACRS depreciation       18. Amended tax return Subtract line 16 from line 15. Amended tax return This is your basis for depreciation. Amended tax return       19. Amended tax return Multiply line 18 by line 6. Amended tax return This is your tentative MACRS depreciation deduction. Amended tax return       20. Amended tax return Enter the lesser of line 17 or line 19. Amended tax return This is your MACRS depreciation deduction. Amended tax return     1 When figuring the amount to enter on line 12, do not reduce your cost or other basis by any section 179 deduction you claimed for your car. Amended tax return 2 Reduce the basis by the lesser of $4,000 or 10% of the cost of the vehicle even if the credit is less than that amount. Amended tax return             Deductions After the Recovery Period If the depreciation deductions for your automobile are reduced under the passenger automobile limits, you will have unrecovered basis in your automobile at the end of the recovery period. Amended tax return If you continue to use the automobile for business, you can deduct that unrecovered basis after the recovery period ends. Amended tax return You can claim a depreciation deduction in each succeeding tax year until you recover your full basis in the car. Amended tax return The maximum amount you can deduct each year is determined by the date you placed the car in service and your business/investment-use percentage. Amended tax return See Maximum Depreciation Deduction , earlier. Amended tax return Unrecovered basis is the cost or other basis of the passenger automobile reduced by any clean-fuel vehicle deduction, electric vehicle credit, depreciation, and section 179 deductions that would have been allowable if you had used the car 100% for business and investment use and the passenger automobile limits had not applied. Amended tax return You cannot claim a depreciation deduction for listed property other than passenger automobiles after the recovery period ends. Amended tax return There is no unrecovered basis at the end of the recovery period because you are considered to have used this property 100% for business and investment purposes during all of the recovery period. Amended tax return Example. Amended tax return In May 2007, you bought and placed in service a car costing $31,500. Amended tax return The car was 5-year property under GDS (MACRS). Amended tax return You did not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. Amended tax return You used the car exclusively for business during the recovery period (2007 through 2012). Amended tax return You figured your depreciation as shown below. Amended tax return Year Percentage Amount Limit   Allowed 2007 20. Amended tax return 0% $6,300 $2,960   $2,960 2008 32. Amended tax return 0 10,080 4,800   4,800 2009 19. Amended tax return 2 6,048 2,850   2,850 2010 11. Amended tax return 52 3,629 1,675   1,675 2011 11. Amended tax return 52 3,629 1,675   1,675 2012 5. Amended tax return 76 1,814 1,675   1,675 Total   $15,635 At the end of 2012, you had an unrecovered basis of $15,865 ($31,500 − $15,635). Amended tax return If in 2013 and later years you continue to use the car 100% for business, you can deduct each year the lesser of $1,675 or your remaining unrecovered basis. Amended tax return If your business use of the car had been less than 100% during any year, your depreciation deduction would have been less than the maximum amount allowable for that year. Amended tax return However, in figuring your unrecovered basis in the car, you would still reduce your basis by the maximum amount allowable as if the business use had been 100%. Amended tax return For example, if you had used your car 60% for business instead of 100%, your allowable depreciation deductions would have been $9,519 ($15,865 × 60%), but you still would have to reduce your basis by $15,865 to determine your unrecovered basis. Amended tax return Deductions For Passenger Automobiles Acquired in a Trade-in If you acquire a passenger automobile in a trade-in, depreciate the carryover basis separately as if the trade-in did not occur. Amended tax return Depreciate the part of the new automobile's basis that exceeds its carryover basis (excess basis) as if it were newly placed in service property. Amended tax return This excess basis is the additional cash paid for the new automobile in the trade-in. Amended tax return The depreciation figured for the two components of the basis (carryover basis and excess basis) is subject to a single passenger automobile limit. Amended tax return Special rules apply in determining the passenger automobile limits. Amended tax return These rules and examples are discussed in section 1. Amended tax return 168(i)-6(d)(3) of the regulations. Amended tax return Instead of figuring depreciation for the carryover basis and the excess basis separately, you can elect to treat the old automobile as disposed of and both of the basis components for the new automobile as if placed in service at the time of the trade-in. Amended tax return For more information, including how to make this election, see Election out under Property Acquired in a Like-kind Exchange or Involuntary Conversion in chapter 4 and sections 1. Amended tax return 168(i)-6(i) and 1. Amended tax return 168(i)-6(j) of the regulations. Amended tax return What Records Must Be Kept? You cannot take any depreciation or section 179 deduction for the use of listed property unless you can prove your business/investment use with adequate records or with sufficient evidence to support your own statements. Amended tax return For listed property, you must keep records for as long as any recapture can still occur. Amended tax return Recapture can occur in any tax year of the recovery period. Amended tax return Adequate Records To meet the adequate records requirement, you must maintain an account book, diary, log, statement of expense, trip sheet, or similar record or other documentary evidence that, together with the receipt, is sufficient to establish each element of an expenditure or use. Amended tax return You do not have to record information in an account book, diary, or similar record if the information is already shown on the receipt. Amended tax return However, your records should back up your receipts in an orderly manner. Amended tax return Elements of expenditure or use. Amended tax return   Your records or other documentary evidence must support all the following. Amended tax return The amount of each separate expenditure, such as the cost of acquiring the item, maintenance and repair costs, capital improvement costs, lease payments, and any other expenses. Amended tax return The amount of each business and investment use (based on an appropriate measure, such as mileage for vehicles and time for other listed property), and the total use of the property for the tax year. Amended tax return The date of the expenditure or use. Amended tax return The business or investment purpose for the expenditure or use. Amended tax return   Written documents of your expenditure or use are generally better evidence than oral statements alone. Amended tax return You do not have to keep a daily log. Amended tax return However, some type of record containing the elements of an expenditure or the business or investment use of listed property made at or near the time of the expenditure or use and backed up by other documents is preferable to a statement you prepare later. Amended tax return Timeliness. Amended tax return   You must record the elements of an expenditure or use at the time you have full knowledge of the elements. Amended tax return An expense account statement made from an account book, diary, or similar record prepared or maintained at or near the time of the expenditure or use generally is considered a timely record if, in the regular course of business: The statement is given by an employee to the employer, or The statement is given by an independent contractor to the client or customer. Amended tax return   For example, a log maintained on a weekly basis, that accounts for use during the week, will be considered a record made at or near the time of use. Amended tax return Business purpose supported. Amended tax return   Generally, an adequate record of business purpose must be in the form of a written statement. Amended tax return However, the amount of detail necessary to establish a business purpose depends on the facts and circumstances of each case. Amended tax return A written explanation of the business purpose will not be required if the purpose can be determined from the surrounding facts and circumstances. Amended tax return For example, a salesperson visiting customers on an established sales route will not normally need a written explanation of the business purpose of his or her travel. Amended tax return Business use supported. Amended tax return   An adequate record contains enough information on each element of every business or investment use. Amended tax return The amount of detail required to support the use depends on the facts and circumstances. Amended tax return For example, a taxpayer who uses a truck for both business and personal purposes and whose only business use of the truck is to make customer deliveries on an established route can satisfy the requirement by recording the length of the route, including the total number of miles driven during the tax year and the date of each trip at or near the time of the trips. Amended tax return   Although you generally must prepare an adequate written record, you can prepare a record of the business use of listed property in a computer memory device that uses a logging program. Amended tax return Separate or combined expenditures or uses. Amended tax return   Each use by you normally is considered a separate use. Amended tax return However, you can combine repeated uses as a single item. Amended tax return   Record each expenditure as a separate item. Amended tax return Do not combine it with other expenditures. Amended tax return If you choose, however, you can combine amounts you spent for the use of listed property during a tax year, such as for gasoline or automobile repairs. Amended tax return If you combine these expenses, you do not need to support the business purpose of each expense. Amended tax return Instead, you can divide the expenses based on the total business use of the listed property. Amended tax return   You can account for uses that can be considered part of a single use, such as a round trip or uninterrupted business use, by a single record. Amended tax return For example, you can account for the use of a truck to make deliveries at several locations that begin and end at the business premises and can include a stop at the business in between deliveries by a single record of miles driven. Amended tax return You can account for the use of a passenger automobile by a salesperson for a business trip away from home over a period of time by a single record of miles traveled. Amended tax return Minimal personal use (such as a stop for lunch between two business stops) is not an interruption of business use. Amended tax return Confidential information. Amended tax return   If any of the information on the elements of an expenditure or use is confidential, you do not need to include it in the account book or similar record if you record it at or near the time of the expenditure or use. Amended tax return You must keep it elsewhere and make it available as support to the IRS director for your area on request. Amended tax return Substantial compliance. Amended tax return   If you have not fully supported a particular element of an expenditure or use, but have complied with the adequate records requirement for the expenditure or use to the satisfaction of the IRS director for your area, you can establish this element by any evidence the IRS director for your area deems adequate. Amended tax return   If you fail to establish to the satisfaction of the IRS director for your area that you have substantially complied with the adequate records requirement for an element of an expenditure or use, you must establish the element as follows. Amended tax return By your own oral or written statement containing detailed information as to the element. Amended tax return By other evidence sufficient to establish the element. Amended tax return   If the element is the cost or amount, time, place, or date of an expenditure or use, its supporting evidence must be direct evidence, such as oral testimony by witnesses or a written statement setting forth detailed information about the element or the documentary evidence. Amended tax return If the element is the business purpose of an expenditure, its supporting evidence can be circumstantial evidence. Amended tax return Sampling. Amended tax return   You can maintain an adequate record for part of a tax year and use that record to support your business and investment use of listed property for the entire tax year if it can be shown by other evidence that the periods for which you maintain an adequate record are representative of the use throughout the year. Amended tax return Example 1. Amended tax return Denise Williams, a sole proprietor and calendar year taxpayer, operates an interior decorating business out of her home. Amended tax return She uses her automobile for local business visits to the homes or offices of clients, for meetings with suppliers and subcontractors, and to pick up and deliver items to clients. Amended tax return There is no other business use of the automobile, but she and family members also use it for personal purposes. Amended tax return She maintains adequate records for the first 3 months of the year showing that 75% of the automobile use was for business. Amended tax return Subcontractor invoices and paid bills show that her business continued at approximately the same rate for the rest of the year. Amended tax return If there is no change in circumstances, such as the purchase of a second car for exclusive use in her business, the determination that her combined business/investment use of the automobile for the tax year is 75% rests on sufficient supporting evidence. Amended tax return Example 2. Amended tax return Assume the same facts as in Example 1, except that Denise maintains adequate records during the first week of every month showing that 75% of her use of the automobile is for business. Amended tax return Her business invoices show that her business continued at the same rate during the later weeks of each month so that her weekly records are representative of the automobile's business use throughout the month. Amended tax return The determination that her business/investment use of the automobile for the tax year is 75% rests on sufficient supporting evidence. Amended tax return Example 3. Amended tax return Bill Baker, a sole proprietor and calendar year taxpayer, is a salesman in a large metropolitan area for a company that manufactures household products. Amended tax return For the first 3 weeks of each month, he occasionally uses his own automobile for business travel within the metropolitan area. Amended tax return During these weeks, his business use of the automobile does not follow a consistent pattern. Amended tax return During the fourth week of each month, he delivers all business orders taken during the previous month. Amended tax return The business use of his automobile, as supported by adequate records, is 70% of its total use during that fourth week. Amended tax return The determination based on the record maintained during the fourth week of the month that his business/investment use of the automobile for the tax year is 70% does not rest on sufficient supporting evidence because his use during that week is not representative of use during other periods. Amended tax return Loss of records. Amended tax return   When you establish that failure to produce adequate records is due to loss of the records through circumstances beyond your control, such as through fire, flood, earthquake, or other casualty, you have the right to support a deduction by reasonable reconstruction of your expenditures and use. Amended tax return How Is Listed Property Information Reported? You must provide the information about your listed property requested in Part V of Form 4562, Section A, if you claim either of the following deductions. Amended tax return Any deduction for a vehicle. Amended tax return A depreciation deduction for any other listed property. Amended tax return If you claim any deduction for a vehicle, you also must provide the information requested in Section B. Amended tax return If you provide the vehicle for your employee's use, the employee must give you this information. Amended tax return If you provide any vehicle for use by an employee, you must first answer the questions in Section C to see if you meet an exception to completing Section B for that vehicle. Amended tax return Vehicles used by your employees. Amended tax return   You do not have to complete Section B, Part V, for vehicles used by your employees who are not more-than-5% owners or related persons if you meet at least one of the following requirements. Amended tax return You maintain a written policy statement that prohibits one of the following uses of the vehicles. Amended tax return All personal use including commuting. Amended tax return Personal use, other than commuting, by employees who are not officers, directors, or 1%-or-more owners. Amended tax return You treat all use of the vehicles by your employees as personal use. Amended tax return You provide more than five vehicles for use by your employees, and you keep in your records the information on their use given to you by the employees. Amended tax return For demonstrator automobiles provided to full-time salespersons, you maintain a written policy statement that limits the total mileage outside the salesperson's normal working hours and prohibits use of the automobile by anyone else, for vacation trips, or to store personal possessions. Amended tax return Exceptions. Amended tax return   If you file Form 2106, 2106-EZ, or Schedule C-EZ (Form 1040), and you are not required to file Form 4562, report information about listed property on that form and not on Form 4562. Amended tax return Also, if you file Schedule C (Form 1040) and are claiming the standard mileage rate or actual vehicle expenses (except depreciation) and you are not required to file Form 4562 for any other reason, report vehicle information in Part IV of Schedule C and not on Form 4562. Amended tax return Prev  Up  Next   Home   More Online Publications