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File 2011 Taxes Turbotax

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File 2011 taxes turbotax Publication 561 - Additional Material Table of Contents Tax Publications for Individual Taxpayers and Commonly Used Tax Forms Tax Publications for Individual Taxpayers and Commonly Used Tax Forms. File 2011 taxes turbotax  Summary: This is a listing of tax publications and commonly used tax forms. File 2011 taxes turbotax The text states:Tax Publications for Individual Taxpayers. File 2011 taxes turbotax  See How to Get Tax Help for a variety of ways to get publications, including by computer, phone, and mail. File 2011 taxes turbotax General Guides. File 2011 taxes turbotax   1--Your Rights as a Taxpayer 17--Your Federal Income Tax (For Individuals) 334--Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) 509--Tax Calendars for 2007 553--Highlights of 2006 Tax Changes 910--IRS Guide to Free Tax Services Specialized Publications. File 2011 taxes turbotax   3--Armed Forces' Tax Guide 54--Tax Guide for U. File 2011 taxes turbotax S. File 2011 taxes turbotax Citizens and Residents Aliens Abroad 225--Farmer's Tax Guide 463--Travel, Entertainment, Gift, and Car Expenses 501--Exemptions, Standard Deduction, and Filing Information 502--Medical and Dental Expenses 503--Child and Dependent Care Expenses 504--Divorced or Separated Individuals 505--Tax Withholding and Estimated Tax 514--Foreign Tax Credit for Individuals 516--U. File 2011 taxes turbotax S. File 2011 taxes turbotax Government Civilian Employees Stationed Abroad 517--Social Security and Other Information for Members of the Clergy and Religious Workers 519--U. File 2011 taxes turbotax S. File 2011 taxes turbotax Tax Guide for Aliens 520--Scholarships and Fellowships 521--Moving Expenses 523--Selling Your Home 524--Credit for the Elderly or the Disabled 525--Taxable and Nontaxable Income 526--Charitable Contributions 527--Residential Rental Property 529--Miscellaneous Deductions 530--Tax Information for First-Time Homeowners 531--Reporting Tip Income 536--Net Operating Losses (NOLs) for Individuals, Estates, and Trusts 537--Installment Sales 541--Partnerships 544--Sales and Other Dispositions of Assets 547--Casualties, Disasters, and Thefts 550--Investment Income and Expenses 551--Basis of Assets 552--Recordkeeping for Individuals 554--Older Americans' Tax Guide 555--Community Property 556--Examination of Returns, Appeal Rights, and Claims for Refund 559--Survivors, Executors, and Administrators 561--Determining the Value of Donated Property 564--Mutual Fund Distributions 570--Tax Guide for Individuals With Income From U. File 2011 taxes turbotax S. File 2011 taxes turbotax Possessions 571--Tax-Sheltered Annuity Plans (403(b) Plans) 575--Pension and Annuity Income 584--Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property) 587--Business Use of Your Home (Including Use by Daycare Providers) 590--Individual Retirement Arrangements (IRAs) 593--Tax Highlights for U. File 2011 taxes turbotax S. File 2011 taxes turbotax Citizens and Residents Going Abroad 594--What You Should Know About the IRS Collection Process 596--Earned Income Credit (EIC) 721--Tax Guide to U. File 2011 taxes turbotax S. File 2011 taxes turbotax Civil Service Retirement Benefits 901--U. File 2011 taxes turbotax S. File 2011 taxes turbotax Tax Treaties 907--Tax Highlights for Persons with Disabilities 908--Bankruptcy Tax Guide 915--Social Security and Equivalent Railroad Retirement Benefits 919--How Do I Adjust My Tax Withholding? 925--Passive Activity and At-Risk Rules 926--Household Employer's Tax Guide 929--Tax Rules for Children and Dependents 936--Home Mortgage Interest Deduction 946--How to Depreciate Property 947--Practice Before the IRS and Power of Attorney 950--Introduction to Estate and Gift Taxes 967--The IRS Will Figure Your Tax 969--Health Savings Accounts and Other Tax-Favored Health Plans 970--Tax Benefits for Education 971--Innocent Spouse Relief 972--Child Tax Credit 1542--Per Diem Rates 1544--Reporting Cash Payments of Over $10,000 (Received in a Trade or Business) 1546--The Taxpayer Advocate Service of the IRS - How to Get Help With Unresolved Tax Problems Spanish Language Publications. File 2011 taxes turbotax   1SP--Derechos del Contribuyente 579SP--Cómo Preparar la Declaración de Impuesto Federal 594SP--Que es lo que Debemos Saber sobre el Proceso de Cobro del IRS 596SP--Crédito por Ingreso del Trabajo 850--English-Spanish Glossary of Words and Phrases Used in Publications Issued by the Internal Revenue Service 1544SP--Informe de Pagos en Efectivo en Exceso de $10,000 (Recibidos en una Ocupación o Negocio) Commonly Used Tax Forms. File 2011 taxes turbotax  See How To Get Tax Help for a variety of ways to get forms, including by computer, fax, phone, and mail. File 2011 taxes turbotax 1040--U. File 2011 taxes turbotax S. File 2011 taxes turbotax Individual Income Tax Return Schedule A&B--Itemized Deductions & Interest and Ordinary Dividends Schedule C--Profit or Loss From Business Schedule C-EZ--Net Profit From Business Schedule D--Capital Gains and Losses Schedule D-1--Continuation Sheet for Schedule D Schedule E--Supplemental Income and Loss Schedule EIC--Earned Income Credit Schedule F--Profit or Loss From Farming Schedule H--Household Employment Taxes Schedule J--Income Averaging for Farmers and Fishermen Schedule R--Credit for the Elderly or the Disabled Schedule SE--Self-Employment Tax 1040A--U. File 2011 taxes turbotax S. File 2011 taxes turbotax Individual Income Tax Return Schedule 1--Interest and Ordinary Dividends for Form 1040A Filers Schedule 2--Child and Dependent Care Expenses for Form 1040A Filers Schedule 3--Credit for the Elderly or the Disabled for Form 1040A Filers 1040EZ--Income Tax Return for Single and Joint Filers With No Dependents 1040-ES--Estimated Tax for Individuals 1040X--Amended U. File 2011 taxes turbotax S. File 2011 taxes turbotax Individual Income Tax Return 2106--Employee Business Expenses 2106-EZ--Unreimbursed Employee Business Expenses 2210--Underpayment of Estimated Tax by Individuals, Estates, and Trusts 2441--Child and Dependent Care Expenses 2848--Power of Attorney and Declaration of Representative 3903--Moving Expenses 4562--Depreciation and Amortization 4868--Application for Automatic Extension of Time To File U. File 2011 taxes turbotax S. File 2011 taxes turbotax Individual Income Tax Return 4952--Investment Interest Expense Deduction 5329--Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts 6251--Alternative Minimum Tax--Individuals 8283--Noncash Charitable Contributions 8582--Passive Activity Loss Limitations 8606--Nondeductible IRAs 8812--Additional Child Tax Credit 8822--Change of Address 8829--Expenses for Business Use of Your Home 8863--Education Credits 9465--Installment Agreement Request Prev  Up  Next   Home   More Online Publications
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Rural Utilities Service

The Department of Agriculture's Rural Utilities Service provides funding, through grants, loans, loan guarantees, and payments, for the development of rural utilities infrastructure such as water, waste management, power and telecommunications.

Contact the Agency or Department

Website: Rural Utilities Service

Contact In-Person: Find an Office in Your State

Address: USDA Rural Development, Room 4051-S
1400 Independence Ave SW

Washington, DC 20250-1510

Phone Number: (202) 720-9540

TTY: (800) 877-8339 (Federal Relay Service)

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The File 2011 Taxes Turbotax

File 2011 taxes turbotax 5. File 2011 taxes turbotax   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. File 2011 taxes turbotax Listed property includes cars and other property used for transportation, property used for entertainment, and certain computers. File 2011 taxes turbotax Deductions for listed property (other than certain leased property) are subject to the following special rules and limits. File 2011 taxes turbotax Deduction for employees. File 2011 taxes turbotax 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. File 2011 taxes turbotax Business-use requirement. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax You may also have to recapture (include in income) any excess depreciation claimed in previous years. File 2011 taxes turbotax A similar inclusion amount applies to certain leased property. File 2011 taxes turbotax Passenger automobile limits and rules. File 2011 taxes turbotax Annual limits apply to depreciation deductions (including section 179 deductions and any special depreciation allowance) for certain passenger automobiles. File 2011 taxes turbotax You can continue to deduct depreciation for the unrecovered basis resulting from these limits after the end of the recovery period. File 2011 taxes turbotax 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. File 2011 taxes turbotax It also discusses the recordkeeping rules for listed property and explains how to report information about the property on your tax return. File 2011 taxes turbotax 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. File 2011 taxes turbotax What Is Listed Property? Listed property is any of the following. File 2011 taxes turbotax Passenger automobiles (as defined later). File 2011 taxes turbotax Any other property used for transportation, unless it is an excepted vehicle. File 2011 taxes turbotax Property generally used for entertainment, recreation, or amusement (including photographic, phonographic, communication, and video-recording equipment). File 2011 taxes turbotax Computers and related peripheral equipment, unless used only at a regular business establishment and owned or leased by the person operating the establishment. File 2011 taxes turbotax 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. File 2011 taxes turbotax Improvements to listed property. File 2011 taxes turbotax   An improvement made to listed property that must be capitalized is treated as a new item of depreciable property. File 2011 taxes turbotax The recovery period and method of depreciation that apply to the listed property as a whole also apply to the improvement. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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). File 2011 taxes turbotax 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. File 2011 taxes turbotax The following vehicles are not considered passenger automobiles for these purposes. File 2011 taxes turbotax An ambulance, hearse, or combination ambulance-hearse used directly in a trade or business. File 2011 taxes turbotax A vehicle used directly in the trade or business of transporting persons or property for pay or hire. File 2011 taxes turbotax A truck or van that is a qualified nonpersonal use vehicle. File 2011 taxes turbotax Qualified nonpersonal use vehicles. File 2011 taxes turbotax   Qualified nonpersonal use vehicles are vehicles that by their nature are not likely to be used more than a minimal amount for personal purposes. File 2011 taxes turbotax They include the trucks and vans listed as excepted vehicles under Other Property Used for Transportation , next. File 2011 taxes turbotax 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. File 2011 taxes turbotax For a detailed discussion of passenger automobiles, including leased passenger automobiles, see  Publication 463. File 2011 taxes turbotax 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. File 2011 taxes turbotax Other property used for transportation includes trucks, buses, boats, airplanes, motorcycles, and any other vehicles used to transport persons or goods. File 2011 taxes turbotax Excepted vehicles. File 2011 taxes turbotax   Other property used for transportation does not include the following qualified nonpersonal use vehicles (defined earlier under Passenger Automobiles ). File 2011 taxes turbotax Clearly marked police and fire vehicles. File 2011 taxes turbotax Unmarked vehicles used by law enforcement officers if the use is officially authorized. File 2011 taxes turbotax Ambulances used as such and hearses used as such. File 2011 taxes turbotax Any vehicle with a loaded gross vehicle weight of over 14,000 pounds that is designed to carry cargo. File 2011 taxes turbotax Bucket trucks (cherry pickers), cement mixers, dump trucks (including garbage trucks), flatbed trucks, and refrigerated trucks. File 2011 taxes turbotax Combines, cranes and derricks, and forklifts. File 2011 taxes turbotax Delivery trucks with seating only for the driver, or only for the driver plus a folding jump seat. File 2011 taxes turbotax Qualified moving vans. File 2011 taxes turbotax Qualified specialized utility repair trucks. File 2011 taxes turbotax School buses used in transporting students and employees of schools. File 2011 taxes turbotax Other buses with a capacity of at least 20 passengers that are used as passenger buses. File 2011 taxes turbotax Tractors and other special purpose farm vehicles. File 2011 taxes turbotax Clearly marked police and fire vehicle. File 2011 taxes turbotax   A clearly marked police or fire vehicle is a vehicle that meets all the following requirements. File 2011 taxes turbotax It is owned or leased by a governmental unit or an agency or instrumentality of a governmental unit. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax It is clearly marked with painted insignia or words that make it readily apparent that it is a police or fire vehicle. File 2011 taxes turbotax A marking on a license plate is not a clear marking for these purposes. File 2011 taxes turbotax Qualified moving van. File 2011 taxes turbotax   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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Personal use for travel to and from a move site happens no more than five times a month on average. File 2011 taxes turbotax 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. File 2011 taxes turbotax Qualified specialized utility repair truck. File 2011 taxes turbotax   A truck is a qualified specialized utility repair truck if it is not a van or pickup truck and all the following apply. File 2011 taxes turbotax The truck was specifically designed for and is used to carry heavy tools, testing equipment, or parts. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax It consists of a central processing unit with extensive storage, logic, arithmetic, and control capabilities. File 2011 taxes turbotax Related peripheral equipment is any auxiliary machine which is designed to be controlled by the central processing unit of a computer. File 2011 taxes turbotax The following are neither computers nor related peripheral equipment. File 2011 taxes turbotax Any equipment that is an integral part of other property that is not a computer. File 2011 taxes turbotax Typewriters, calculators, adding and accounting machines, copiers, duplicating equipment, and similar equipment. File 2011 taxes turbotax Equipment of a kind used primarily for the user's amusement or entertainment, such as video games. File 2011 taxes turbotax 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. File 2011 taxes turbotax The use of your property in performing services as an employee is a business use only if both the following requirements are met. File 2011 taxes turbotax The use is for your employer's convenience. File 2011 taxes turbotax The use is required as a condition of your employment. File 2011 taxes turbotax 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. File 2011 taxes turbotax Employer's convenience. File 2011 taxes turbotax   Whether the use of listed property is for your employer's convenience must be determined from all the facts. File 2011 taxes turbotax The use is for your employer's convenience if it is for a substantial business reason of the employer. File 2011 taxes turbotax The use of listed property during your regular working hours to carry on your employer's business generally is for the employer's convenience. File 2011 taxes turbotax Condition of employment. File 2011 taxes turbotax   Whether the use of listed property is a condition of your employment depends on all the facts and circumstances. File 2011 taxes turbotax The use of property must be required for you to perform your duties properly. File 2011 taxes turbotax Your employer does not have to require explicitly that you use the property. File 2011 taxes turbotax However, a mere statement by the employer that the use of the property is a condition of your employment is not sufficient. File 2011 taxes turbotax Example 1. File 2011 taxes turbotax Virginia Sycamore is employed as a courier with We Deliver, which provides local courier services. File 2011 taxes turbotax She owns and uses a motorcycle to deliver packages to downtown offices. File 2011 taxes turbotax We Deliver explicitly requires all delivery persons to own a car or motorcycle for use in their employment. File 2011 taxes turbotax Virginia's use of the motorcycle is for the convenience of We Deliver and is required as a condition of employment. File 2011 taxes turbotax Example 2. File 2011 taxes turbotax Bill Nelson is an inspector for Uplift, a construction company with many sites in the local area. File 2011 taxes turbotax He must travel to these sites on a regular basis. File 2011 taxes turbotax Uplift does not furnish an automobile or explicitly require him to use his own automobile. File 2011 taxes turbotax However, it pays him for any costs he incurs in traveling to the various sites. File 2011 taxes turbotax The use of his own automobile or a rental automobile is for the convenience of Uplift and is required as a condition of employment. File 2011 taxes turbotax Example 3. File 2011 taxes turbotax 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. File 2011 taxes turbotax The use of his own car is neither for the convenience of Uplift nor required as a condition of employment. File 2011 taxes turbotax Example 4. File 2011 taxes turbotax Marilyn Lee is a pilot for Y Company, a small charter airline. File 2011 taxes turbotax Y requires pilots to obtain 80 hours of flight time annually in addition to flight time spent with the airline. File 2011 taxes turbotax Pilots usually can obtain these hours by flying with the Air Force Reserve or by flying part-time with another airline. File 2011 taxes turbotax Marilyn owns her own airplane. File 2011 taxes turbotax 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. File 2011 taxes turbotax Example 5. File 2011 taxes turbotax David Rule is employed as an engineer with Zip, an engineering contracting firm. File 2011 taxes turbotax He occasionally takes work home at night rather than work late in the office. File 2011 taxes turbotax He owns and uses a home computer which is virtually identical to the office model. File 2011 taxes turbotax His use of the computer is neither for the convenience of his employer nor required as a condition of employment. File 2011 taxes turbotax 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. File 2011 taxes turbotax To meet this requirement, listed property must be used predominantly (more than 50% of its total use) for qualified business use. File 2011 taxes turbotax If this requirement is not met, the following rules apply. File 2011 taxes turbotax Property not used predominantly for qualified business use during the year it is placed in service does not qualify for the section 179 deduction. File 2011 taxes turbotax Property not used predominantly for qualified business use during the year it is placed in service does not qualify for a special depreciation allowance. File 2011 taxes turbotax 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. File 2011 taxes turbotax This rule applies each year of the recovery period. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Exception for leased property. File 2011 taxes turbotax   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. File 2011 taxes turbotax   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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Occasional or incidental leasing activity is insufficient. File 2011 taxes turbotax For example, if you lease only one passenger automobile during a tax year, you are not regularly engaged in the business of leasing automobiles. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax For passenger automobiles and other means of transportation, allocate the property's use on the basis of mileage. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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). File 2011 taxes turbotax 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. File 2011 taxes turbotax Entertainment use. File 2011 taxes turbotax   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. File 2011 taxes turbotax Commuting use. File 2011 taxes turbotax   The use of an automobile for commuting is not business use, regardless of whether work is performed during the trip. File 2011 taxes turbotax 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. File 2011 taxes turbotax This is also true for a business meeting held in a car while commuting to work. File 2011 taxes turbotax Similarly, a business call made on an otherwise personal trip does not change the character of a trip from personal to business. File 2011 taxes turbotax 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. File 2011 taxes turbotax Use of your automobile by another person. File 2011 taxes turbotax   If someone else uses your automobile, do not treat that use as business use unless one of the following conditions applies. File 2011 taxes turbotax That use is directly connected with your business. File 2011 taxes turbotax You properly report the value of the use as income to the other person and withhold tax on the income where required. File 2011 taxes turbotax You are paid a fair market rent. File 2011 taxes turbotax Treat any payment to you for the use of the automobile as a rent payment for purposes of item (3). File 2011 taxes turbotax Employee deductions. File 2011 taxes turbotax   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. File 2011 taxes turbotax See Can Employees Claim a Deduction , earlier. File 2011 taxes turbotax Qualified Business Use Qualified business use of listed property is any use of the property in your trade or business. File 2011 taxes turbotax However, it does not include the following uses. File 2011 taxes turbotax 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). File 2011 taxes turbotax The use of property as pay for the services of a 5% owner or related person. File 2011 taxes turbotax 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. File 2011 taxes turbotax Property does not stop being used predominantly for qualified business use because of a transfer at death. File 2011 taxes turbotax Exception for leasing or compensatory use of aircraft. File 2011 taxes turbotax   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. File 2011 taxes turbotax 5% owner. File 2011 taxes turbotax   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. File 2011 taxes turbotax   For a corporation, a 5% owner is any person who owns, or is considered to own, either of the following. File 2011 taxes turbotax More than 5% of the outstanding stock of the corporation. File 2011 taxes turbotax Stock possessing more than 5% of the total combined voting power of all stock in the corporation. File 2011 taxes turbotax Related persons. File 2011 taxes turbotax   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 . File 2011 taxes turbotax 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. File 2011 taxes turbotax Examples. File 2011 taxes turbotax   The following examples illustrate whether the use of business property is qualified business use. File 2011 taxes turbotax Example 1. File 2011 taxes turbotax John Maple is the sole proprietor of a plumbing contracting business. File 2011 taxes turbotax John employs his brother, Richard, in the business. File 2011 taxes turbotax As part of Richard's pay, he is allowed to use one of the company automobiles for personal use. File 2011 taxes turbotax The company includes the value of the personal use of the automobile in Richard's gross income and properly withholds tax on it. File 2011 taxes turbotax The use of the automobile is pay for the performance of services by a related person, so it is not a qualified business use. File 2011 taxes turbotax Example 2. File 2011 taxes turbotax John, in Example 1, allows unrelated employees to use company automobiles for personal purposes. File 2011 taxes turbotax 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. File 2011 taxes turbotax This use of company automobiles by employees is not a qualified business use. File 2011 taxes turbotax Example 3. File 2011 taxes turbotax James Company Inc. File 2011 taxes turbotax owns several automobiles that its employees use for business purposes. File 2011 taxes turbotax The employees also are allowed to take the automobiles home at night. File 2011 taxes turbotax 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. File 2011 taxes turbotax This use of company automobiles by employees, even for personal purposes, is a qualified business use for the company. File 2011 taxes turbotax Investment Use The use of property to produce income in a nonbusiness activity (investment use) is not a qualified business use. File 2011 taxes turbotax However, you can treat the investment use as business use to figure the depreciation deduction for the property in a given year. File 2011 taxes turbotax Example 1. File 2011 taxes turbotax Sarah Bradley uses a home computer 50% of the time to manage her investments. File 2011 taxes turbotax She also uses the computer 40% of the time in her part-time consumer research business. File 2011 taxes turbotax Sarah's home computer is listed property because it is not used at a regular business establishment. File 2011 taxes turbotax She does not use the computer predominantly for qualified business use. File 2011 taxes turbotax Therefore, she cannot elect a section 179 deduction or claim a special depreciation allowance for the computer. File 2011 taxes turbotax She must depreciate it using the straight line method over the ADS recovery period. File 2011 taxes turbotax Her combined business/investment use for determining her depreciation deduction is 90%. File 2011 taxes turbotax Example 2. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Her combined business/investment use for determining her depreciation deduction is 90%. File 2011 taxes turbotax 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. File 2011 taxes turbotax You also increase the adjusted basis of your property by the same amount. File 2011 taxes turbotax 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. File 2011 taxes turbotax To determine the amount in (2) above, you must refigure the depreciation using the straight line method and the ADS recovery period. File 2011 taxes turbotax Example. File 2011 taxes turbotax In June 2009, Ellen Rye purchased and placed in service a pickup truck that cost $18,000. File 2011 taxes turbotax She used it only for qualified business use for 2009 through 2012. File 2011 taxes turbotax Ellen claimed a section 179 deduction of $10,000 based on the purchase of the truck. File 2011 taxes turbotax She began depreciating it using the 200% DB method over a 5-year GDS recovery period. File 2011 taxes turbotax 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. File 2011 taxes turbotax During 2013, she used the truck 50% for business and 50% for personal purposes. File 2011 taxes turbotax She includes $4,018 excess depreciation in her gross income for 2013. File 2011 taxes turbotax The excess depreciation is determined as follows. File 2011 taxes turbotax Total section 179 deduction ($10,000) and depreciation claimed ($6,618) for 2009 through 2012. File 2011 taxes turbotax (Depreciation is from Table A-1. File 2011 taxes turbotax ) $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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Where to figure and report recapture. File 2011 taxes turbotax   Use Form 4797, Part IV, to figure the recapture amount. File 2011 taxes turbotax Report the recapture amount as other income on the same form or schedule on which you took the depreciation deduction. File 2011 taxes turbotax For example, report the recapture amount as other income on Schedule C (Form 1040) if you took the depreciation deduction on Schedule C. File 2011 taxes turbotax If you took the depreciation deduction on Form 2106, report the recapture amount as other income on Form 1040, line 21. File 2011 taxes turbotax 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. File 2011 taxes turbotax Your qualified business-use percentage is the part of the property's total use that is qualified business use (defined earlier). File 2011 taxes turbotax For the inclusion amount rules for a leased passenger automobile, see Leasing a Car in chapter 4 of Publication 463. File 2011 taxes turbotax The inclusion amount is the sum of Amount A and Amount B, described next. File 2011 taxes turbotax 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. File 2011 taxes turbotax Amount A. File 2011 taxes turbotax   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 . File 2011 taxes turbotax   The fair market value of the property is the value on the first day of the lease term. File 2011 taxes turbotax 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. File 2011 taxes turbotax Amount B. File 2011 taxes turbotax   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 . File 2011 taxes turbotax Maximum inclusion amount. File 2011 taxes turbotax   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. File 2011 taxes turbotax Inclusion amount worksheet. File 2011 taxes turbotax   The following worksheet is provided to help you figure the inclusion amount for leased listed property. File 2011 taxes turbotax Inclusion Amount Worksheet for Leased Listed Property 1. File 2011 taxes turbotax Fair market value   2. File 2011 taxes turbotax Business/investment use for first year business use is 50% or less   3. File 2011 taxes turbotax Multiply line 1 by line 2. File 2011 taxes turbotax   4. File 2011 taxes turbotax Rate (%) from Table A-19   5. File 2011 taxes turbotax Multiply line 3 by line 4. File 2011 taxes turbotax This is Amount A. File 2011 taxes turbotax   6. File 2011 taxes turbotax Fair market value   7. File 2011 taxes turbotax Average business/investment use for years property leased before the first year business use is 50% or less . File 2011 taxes turbotax . File 2011 taxes turbotax . File 2011 taxes turbotax . File 2011 taxes turbotax . File 2011 taxes turbotax . File 2011 taxes turbotax . File 2011 taxes turbotax . File 2011 taxes turbotax . File 2011 taxes turbotax . File 2011 taxes turbotax . File 2011 taxes turbotax . File 2011 taxes turbotax . File 2011 taxes turbotax   8. File 2011 taxes turbotax Multiply line 6 by line 7   9. File 2011 taxes turbotax Rate (%) from Table A-20   10. File 2011 taxes turbotax Multiply line 8 by line 9. File 2011 taxes turbotax This is Amount B. File 2011 taxes turbotax   11. File 2011 taxes turbotax Add line 5 and line 10. File 2011 taxes turbotax This is your inclusion amount. File 2011 taxes turbotax 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. File 2011 taxes turbotax )         Example. File 2011 taxes turbotax 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. File 2011 taxes turbotax The lease is for a period of 5 years. File 2011 taxes turbotax Larry does not use the computer at a regular business establishment, so it is listed property. File 2011 taxes turbotax His business use of the property (all of which is qualified business use) is 80% in 2011, 60% in 2012, and 40% in 2013. File 2011 taxes turbotax He must add an inclusion amount to gross income for 2013, the first tax year his qualified business-use percentage is 50% or less. File 2011 taxes turbotax The computer has a 5-year recovery period under both GDS and ADS. File 2011 taxes turbotax 2013 is the third tax year of the lease, so the applicable percentage from Table A-19 is −19. File 2011 taxes turbotax 8%. File 2011 taxes turbotax The applicable percentage from Table A-20 is 22. File 2011 taxes turbotax 0%. File 2011 taxes turbotax Larry's deductible rent for the computer for 2013 is $800. File 2011 taxes turbotax Larry uses the Inclusion amount worksheet. File 2011 taxes turbotax to figure the amount he must include in income for 2013. File 2011 taxes turbotax His inclusion amount is $224, which is the sum of −$238 (Amount A) and $462 (Amount B). File 2011 taxes turbotax Inclusion Amount Worksheet for Leased Listed Property 1. File 2011 taxes turbotax Fair market value $3,000   2. File 2011 taxes turbotax Business/investment use for first year business use is 50% or less 40 % 3. File 2011 taxes turbotax Multiply line 1 by line 2. File 2011 taxes turbotax 1,200   4. File 2011 taxes turbotax Rate (%) from Table A-19 −19. File 2011 taxes turbotax 8 % 5. File 2011 taxes turbotax Multiply line 3 by line 4. File 2011 taxes turbotax This is Amount A. File 2011 taxes turbotax −238   6. File 2011 taxes turbotax Fair market value 3,000   7. File 2011 taxes turbotax Average business/investment use for years property leased before the first year business use is 50% or less 70 % 8. File 2011 taxes turbotax Multiply line 6 by line 7 2,100   9. File 2011 taxes turbotax Rate (%) from Table A-20 22. File 2011 taxes turbotax 0 % 10. File 2011 taxes turbotax Multiply line 8 by line 9. File 2011 taxes turbotax This is Amount B. File 2011 taxes turbotax 462   11. File 2011 taxes turbotax Add line 5 and line 10. File 2011 taxes turbotax This is your inclusion amount. File 2011 taxes turbotax 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. File 2011 taxes turbotax ) $224           Lease beginning in the last 9 months of your tax year. File 2011 taxes turbotax    The inclusion amount is subject to a special rule if all the following apply. File 2011 taxes turbotax The lease term begins within 9 months before the close of your tax year. File 2011 taxes turbotax You do not use the property predominantly (more than 50%) for qualified business use during that part of the tax year. File 2011 taxes turbotax The lease term continues into your next tax year. File 2011 taxes turbotax Under this special rule, add the inclusion amount to income in the next tax year. File 2011 taxes turbotax 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. File 2011 taxes turbotax Skip lines 6 through 9 of the worksheet and enter zero on line 10. File 2011 taxes turbotax Example 1. File 2011 taxes turbotax On August 1, 2012, Julie Rule, a calendar year taxpayer, leased and placed in service an item of listed property. File 2011 taxes turbotax The property is 5-year property with a fair market value of $10,000. File 2011 taxes turbotax Her property has a recovery period of 5 years under ADS. File 2011 taxes turbotax The lease is for 5 years. File 2011 taxes turbotax Her business use of the property was 50% in 2012 and 90% in 2013. File 2011 taxes turbotax She paid rent of $3,600 for 2012, of which $3,240 is deductible. File 2011 taxes turbotax She must include $147 in income in 2013. File 2011 taxes turbotax The $147 is the sum of Amount A and Amount B. File 2011 taxes turbotax Amount A is $147 ($10,000 × 70% × 2. File 2011 taxes turbotax 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 . File 2011 taxes turbotax Amount B is zero. File 2011 taxes turbotax Lease for less than one year. File 2011 taxes turbotax   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. File 2011 taxes turbotax The amount included in income is the inclusion amount (figured as described in the preceding discussions) multiplied by a fraction. File 2011 taxes turbotax The numerator of the fraction is the number of days in the lease term and the denominator is 365 (or 366 for leap years). File 2011 taxes turbotax   The lease term for listed property other than residential rental or nonresidential real property includes options to renew. File 2011 taxes turbotax 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. File 2011 taxes turbotax Example 2. File 2011 taxes turbotax 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. File 2011 taxes turbotax This property had a fair market value of $15,000 and a recovery period of 5 years under ADS. File 2011 taxes turbotax The lease term was 6 months (ending on March 31, 2013), during which he used the property 45% in business. File 2011 taxes turbotax He must include $71 in income in 2013. File 2011 taxes turbotax The $71 is the sum of Amount A and Amount B. File 2011 taxes turbotax Amount A is $71 ($15,000 × 45% × 2. File 2011 taxes turbotax 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. File 2011 taxes turbotax Amount B is zero. File 2011 taxes turbotax Where to report inclusion amount. File 2011 taxes turbotax   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. File 2011 taxes turbotax For example, report the inclusion amount as other income on Schedule C (Form 1040) if you took the deduction on Schedule C. File 2011 taxes turbotax If you took the deduction for rental costs on Form 2106, report the inclusion amount as other income on Form 1040, line 21. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Exception for leased cars. File 2011 taxes turbotax   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. File 2011 taxes turbotax 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 . File 2011 taxes turbotax Maximum Depreciation Deduction The passenger automobile limits are the maximum depreciation amounts you can deduct for a passenger automobile. File 2011 taxes turbotax They are based on the date you placed the automobile in service. File 2011 taxes turbotax Passenger Automobiles The maximum deduction amounts for most passenger automobiles are shown in the following table. File 2011 taxes turbotax 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. File 2011 taxes turbotax 2If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,060. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 5If you acquired the vehicle before 5/06/03, the maximum deduction is $7,660. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax If you have a short tax year, you must reduce the maximum deduction amount by multiplying the maximum amount by a fraction. File 2011 taxes turbotax The numerator of the fraction is the number of months and partial months in the short tax year and the denominator is 12. File 2011 taxes turbotax Example. File 2011 taxes turbotax On April 15, 2013, Virginia Hart bought and placed in service a new car for $14,500. File 2011 taxes turbotax She used the car only in her business. File 2011 taxes turbotax She files her tax return based on the calendar year. File 2011 taxes turbotax She does not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. File 2011 taxes turbotax Under MACRS, a car is 5-year property. File 2011 taxes turbotax 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. File 2011 taxes turbotax Virginia multiplies the $14,500 unadjusted basis of her car by 0. File 2011 taxes turbotax 20 to get her MACRS depreciation of $2,900 for 2013. File 2011 taxes turbotax This $2,900 is below the maximum depreciation deduction of $3,160 for passenger automobiles placed in service in 2013. File 2011 taxes turbotax She can deduct the full $2,900. File 2011 taxes turbotax Electric Vehicles The maximum depreciation deductions for passenger automobiles that are produced to run primarily on electricity are higher than those for other automobiles. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 2If you acquired the vehicle before 5/06/03, the maximum deduction is $22,880. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Trucks and Vans The maximum depreciation deductions for trucks and vans placed in service after 2002 are higher than those for other passenger automobiles. File 2011 taxes turbotax The maximum deduction amounts for trucks and vans are shown in the following table. File 2011 taxes turbotax 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. File 2011 taxes turbotax 2 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,260. File 2011 taxes turbotax 3 If you elected not to claim any special depreciation allowance or the vehicle is not qualified property, the maximum deduction is $3,160. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 7 If you acquired the vehicle before 5/06/03, the maximum deduction is $7,960. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Depreciation Worksheet for Passenger Automobiles You can use the following worksheet to figure your depreciation deduction using the percentage tables. File 2011 taxes turbotax Then use the information from this worksheet to prepare Form 4562. File 2011 taxes turbotax Depreciation Worksheet for Passenger Automobiles   Part I   1. File 2011 taxes turbotax MACRS system (GDS or ADS)     2. File 2011 taxes turbotax Property class     3. File 2011 taxes turbotax Date placed in service     4. File 2011 taxes turbotax Recovery period     5. File 2011 taxes turbotax Method and convention     6. File 2011 taxes turbotax Depreciation rate (from tables)     7. File 2011 taxes turbotax Maximum depreciation deduction for this year from the appropriate table       8. File 2011 taxes turbotax Business/investment-use percentage       9. File 2011 taxes turbotax Multiply line 7 by line 8. File 2011 taxes turbotax This is your adjusted maximum depreciation deduction       10. File 2011 taxes turbotax Section 179 deduction claimed this year (not more than line 9). File 2011 taxes turbotax Enter -0- if this is not the year you placed the car in service. File 2011 taxes turbotax         Note. File 2011 taxes turbotax  1) If line 10 is equal to line 9, stop here. File 2011 taxes turbotax Your combined section 179 and depreciation deduction (including your special depreciation allowance) is limited to the amount on line 9. File 2011 taxes turbotax  2) If line 10 is less than line 9, complete Part II. File 2011 taxes turbotax   Part II   11. File 2011 taxes turbotax Subtract line 10 from line 9. File 2011 taxes turbotax This is the limit on the amount you can deduct for depreciation (including any special depreciation allowance )       12. File 2011 taxes turbotax Cost or other basis (reduced by any alternative motor vehicle credit 1or credit for electric vehicles 2)       13. File 2011 taxes turbotax Multiply line 12 by line 8. File 2011 taxes turbotax This is your business/investment cost       14. File 2011 taxes turbotax Section 179 deduction claimed in the year you placed the car in service       15. File 2011 taxes turbotax Subtract line 14 from line 13. File 2011 taxes turbotax This is your tentative basis for depreciation       16. File 2011 taxes turbotax Multiply line 15 by . File 2011 taxes turbotax 50 if the 50% special depreciation allowance applies. File 2011 taxes turbotax This is your special depreciation allowance. File 2011 taxes turbotax 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. File 2011 taxes turbotax Your depreciation deduction (including your special depreciation allowance) is limited to the amount on line 11. File 2011 taxes turbotax  2) If line 16 is less than line 11, complete Part III. File 2011 taxes turbotax   Part III   17. File 2011 taxes turbotax Subtract line 16 from 11. File 2011 taxes turbotax This is the limit on the amount you can deduct for MACRS depreciation       18. File 2011 taxes turbotax Subtract line 16 from line 15. File 2011 taxes turbotax This is your basis for depreciation. File 2011 taxes turbotax       19. File 2011 taxes turbotax Multiply line 18 by line 6. File 2011 taxes turbotax This is your tentative MACRS depreciation deduction. File 2011 taxes turbotax       20. File 2011 taxes turbotax Enter the lesser of line 17 or line 19. File 2011 taxes turbotax This is your MACRS depreciation deduction. File 2011 taxes turbotax     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. File 2011 taxes turbotax 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. File 2011 taxes turbotax             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. File 2011 taxes turbotax If you continue to use the automobile for business, you can deduct that unrecovered basis after the recovery period ends. File 2011 taxes turbotax You can claim a depreciation deduction in each succeeding tax year until you recover your full basis in the car. File 2011 taxes turbotax 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. File 2011 taxes turbotax See Maximum Depreciation Deduction , earlier. File 2011 taxes turbotax 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. File 2011 taxes turbotax You cannot claim a depreciation deduction for listed property other than passenger automobiles after the recovery period ends. File 2011 taxes turbotax 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. File 2011 taxes turbotax Example. File 2011 taxes turbotax In May 2007, you bought and placed in service a car costing $31,500. File 2011 taxes turbotax The car was 5-year property under GDS (MACRS). File 2011 taxes turbotax You did not elect a section 179 deduction and elected not to claim any special depreciation allowance for the car. File 2011 taxes turbotax You used the car exclusively for business during the recovery period (2007 through 2012). File 2011 taxes turbotax You figured your depreciation as shown below. File 2011 taxes turbotax Year Percentage Amount Limit   Allowed 2007 20. File 2011 taxes turbotax 0% $6,300 $2,960   $2,960 2008 32. File 2011 taxes turbotax 0 10,080 4,800   4,800 2009 19. File 2011 taxes turbotax 2 6,048 2,850   2,850 2010 11. File 2011 taxes turbotax 52 3,629 1,675   1,675 2011 11. File 2011 taxes turbotax 52 3,629 1,675   1,675 2012 5. File 2011 taxes turbotax 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). File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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%. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax This excess basis is the additional cash paid for the new automobile in the trade-in. File 2011 taxes turbotax The depreciation figured for the two components of the basis (carryover basis and excess basis) is subject to a single passenger automobile limit. File 2011 taxes turbotax Special rules apply in determining the passenger automobile limits. File 2011 taxes turbotax These rules and examples are discussed in section 1. File 2011 taxes turbotax 168(i)-6(d)(3) of the regulations. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 168(i)-6(i) and 1. File 2011 taxes turbotax 168(i)-6(j) of the regulations. File 2011 taxes turbotax 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. File 2011 taxes turbotax For listed property, you must keep records for as long as any recapture can still occur. File 2011 taxes turbotax Recapture can occur in any tax year of the recovery period. File 2011 taxes turbotax 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. File 2011 taxes turbotax You do not have to record information in an account book, diary, or similar record if the information is already shown on the receipt. File 2011 taxes turbotax However, your records should back up your receipts in an orderly manner. File 2011 taxes turbotax Elements of expenditure or use. File 2011 taxes turbotax   Your records or other documentary evidence must support all the following. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax The date of the expenditure or use. File 2011 taxes turbotax The business or investment purpose for the expenditure or use. File 2011 taxes turbotax   Written documents of your expenditure or use are generally better evidence than oral statements alone. File 2011 taxes turbotax You do not have to keep a daily log. File 2011 taxes turbotax 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. File 2011 taxes turbotax Timeliness. File 2011 taxes turbotax   You must record the elements of an expenditure or use at the time you have full knowledge of the elements. File 2011 taxes turbotax 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. File 2011 taxes turbotax   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. File 2011 taxes turbotax Business purpose supported. File 2011 taxes turbotax   Generally, an adequate record of business purpose must be in the form of a written statement. File 2011 taxes turbotax However, the amount of detail necessary to establish a business purpose depends on the facts and circumstances of each case. File 2011 taxes turbotax A written explanation of the business purpose will not be required if the purpose can be determined from the surrounding facts and circumstances. File 2011 taxes turbotax 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. File 2011 taxes turbotax Business use supported. File 2011 taxes turbotax   An adequate record contains enough information on each element of every business or investment use. File 2011 taxes turbotax The amount of detail required to support the use depends on the facts and circumstances. File 2011 taxes turbotax 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. File 2011 taxes turbotax   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. File 2011 taxes turbotax Separate or combined expenditures or uses. File 2011 taxes turbotax   Each use by you normally is considered a separate use. File 2011 taxes turbotax However, you can combine repeated uses as a single item. File 2011 taxes turbotax   Record each expenditure as a separate item. File 2011 taxes turbotax Do not combine it with other expenditures. File 2011 taxes turbotax 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. File 2011 taxes turbotax If you combine these expenses, you do not need to support the business purpose of each expense. File 2011 taxes turbotax Instead, you can divide the expenses based on the total business use of the listed property. File 2011 taxes turbotax   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. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Minimal personal use (such as a stop for lunch between two business stops) is not an interruption of business use. File 2011 taxes turbotax Confidential information. File 2011 taxes turbotax   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. File 2011 taxes turbotax You must keep it elsewhere and make it available as support to the IRS director for your area on request. File 2011 taxes turbotax Substantial compliance. File 2011 taxes turbotax   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. File 2011 taxes turbotax   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. File 2011 taxes turbotax By your own oral or written statement containing detailed information as to the element. File 2011 taxes turbotax By other evidence sufficient to establish the element. File 2011 taxes turbotax   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. File 2011 taxes turbotax If the element is the business purpose of an expenditure, its supporting evidence can be circumstantial evidence. File 2011 taxes turbotax Sampling. File 2011 taxes turbotax   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. File 2011 taxes turbotax Example 1. File 2011 taxes turbotax Denise Williams, a sole proprietor and calendar year taxpayer, operates an interior decorating business out of her home. File 2011 taxes turbotax 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. File 2011 taxes turbotax There is no other business use of the automobile, but she and family members also use it for personal purposes. File 2011 taxes turbotax She maintains adequate records for the first 3 months of the year showing that 75% of the automobile use was for business. File 2011 taxes turbotax Subcontractor invoices and paid bills show that her business continued at approximately the same rate for the rest of the year. File 2011 taxes turbotax 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. File 2011 taxes turbotax Example 2. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax The determination that her business/investment use of the automobile for the tax year is 75% rests on sufficient supporting evidence. File 2011 taxes turbotax Example 3. File 2011 taxes turbotax Bill Baker, a sole proprietor and calendar year taxpayer, is a salesman in a large metropolitan area for a company that manufactures household products. File 2011 taxes turbotax For the first 3 weeks of each month, he occasionally uses his own automobile for business travel within the metropolitan area. File 2011 taxes turbotax During these weeks, his business use of the automobile does not follow a consistent pattern. File 2011 taxes turbotax During the fourth week of each month, he delivers all business orders taken during the previous month. File 2011 taxes turbotax The business use of his automobile, as supported by adequate records, is 70% of its total use during that fourth week. File 2011 taxes turbotax 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. File 2011 taxes turbotax Loss of records. File 2011 taxes turbotax   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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Any deduction for a vehicle. File 2011 taxes turbotax A depreciation deduction for any other listed property. File 2011 taxes turbotax If you claim any deduction for a vehicle, you also must provide the information requested in Section B. File 2011 taxes turbotax If you provide the vehicle for your employee's use, the employee must give you this information. File 2011 taxes turbotax 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. File 2011 taxes turbotax Vehicles used by your employees. File 2011 taxes turbotax   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. File 2011 taxes turbotax You maintain a written policy statement that prohibits one of the following uses of the vehicles. File 2011 taxes turbotax All personal use including commuting. File 2011 taxes turbotax Personal use, other than commuting, by employees who are not officers, directors, or 1%-or-more owners. File 2011 taxes turbotax You treat all use of the vehicles by your employees as personal use. File 2011 taxes turbotax 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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Exceptions. File 2011 taxes turbotax   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. File 2011 taxes turbotax 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. File 2011 taxes turbotax Prev  Up  Next   Home   More Online Publications