Instructions For Form 2106 - Employee Business Expenses - 2006 Page 7
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8Depreciation Method and Percentage Chart — Line 33
1
1
Date Placed in Service
(a)
(b)
(c)
Oct. 1 – Dec. 31, 2006
200 DB
5.0 %
150 DB
3.75%
SL
2.5%
Jan. 1 – Sept. 30, 2006
200 DB
20.0
150 DB
15.0
SL
10.0
Oct. 1 – Dec. 31, 2005
200 DB
38.0
150 DB
28.88
SL
20.0
Jan. 1 – Sept. 30, 2005
200 DB
32.0
150 DB
25.5
SL
20.0
Oct. 1 – Dec. 31, 2004
200 DB
22.8
150 DB
20.21
SL
20.0
Jan. 1 – Sept. 30, 2004
200 DB
19.2
150 DB
17.85
SL
20.0
Oct. 1 – Dec. 31, 2003
200 DB
13.68
150 DB
16.4
SL
20.0
Jan. 1 – Sept. 30, 2003
200 DB
11.52
150 DB
16.66
SL
20.0
Oct. 1 – Dec. 31, 2002
200 DB
10.94
150 DB
16.41
SL
20.0
Jan. 1 – Sept. 30, 2002
200 DB
11.52
150 DB
16.66
SL
20.0
2
Oct. 1 – Dec. 31, 2001
200 DB
9.58
150 DB
14.35
SL
17.5
Jan. 1 – Sept. 30, 2001
200 DB
5.76
150 DB
8.33
SL
10.0
3
Prior to 2001
1
You can use this column only if the business use of your car is more than 50%.
2
If you made the election under Notice 2001-70 to use the half-year convention for vehicles placed in service October 1 through December 31, 2001,
use the percentage rate shown for vehicles placed in service January 1 through September 30, 2001.
3
If your car was subject to the maximum limits for depreciation and you have unrecovered basis in the car, you can continue to claim depreciation.
See Pub. 463 for more information.
Line 33. If you used the standard
years (after considering the
Worksheet for the Special
mileage rate in the first year the
depreciation limit for your vehicle).
Depreciation Allowance
vehicle was placed in service and
See the depreciation limit tables on
(keep for your records)
now elect to use the actual expense
page 8.
method, you must use the straight
1. Enter the total amount from
Column (b) —150% declining
line method of depreciation for the
line 30 . . . . . . . . . . . . . . . .
balance method. You can use
vehicle’s estimated useful life.
column (b) only if the business use
2. Multiply line 1 by the
Otherwise, use the Depreciation
percentage on line 14 is more than
percentage on Form 2106,
Method and Percentage Chart above
50%. The 150% declining balance
line 14, and enter the result
to find the depreciation method and
method may give you a smaller
percentage to enter on line 33.
3. Enter any section 179
depreciation deduction than in
deduction . . . . . . . . . . . . . .
To use the chart, first find the date
column (a) for the first 3 years.
you placed the vehicle in service (line
4. Subtract line 3 from line 2 . .
However, you will not have a
11). Then, select the depreciation
“depreciation adjustment” on this
5. Multiply line 4 by 50% (.50)
method and percentage from column
vehicle for the alternative minimum
and enter the result . . . . . . .
(a), (b), or (c). For example, if you
tax. This may result in a smaller tax
placed a car in service on July 1,
6. Multiply the applicable limit
liability if you must file Form 6251,
explained in the line 36
2006, and you use the method in
Alternative Minimum Tax —
instructions by the
column (a), enter “200 DB 20%” on
Individuals.
percentage on Form 2106,
line 33.
line 14, and enter the result. If
Column (c) —straight line
For vehicles placed in service
line 36 limits do not apply,
method. You must use column (c) if
before 2006, use the same method
skip lines 6 and 7, and enter
the business use percentage on line
you used on last year’s return unless
the amount from line 5 on line
14 is 50% or less. The method for
8 . . . . . . . . . . . . . . . . . . . .
a decline in your business use
these vehicles is the straight line
requires a change to the straight line
7. Subtract line 3 from line 6 . .
method over 5 years. The use of this
method. For vehicles placed in
column is optional for these vehicles
8. Enter the smaller of line 5 or
service during 2006, select the
if the business use percentage on line
line 7. Add the result to any
depreciation method and percentage
14 is more than 50%.
section 179 deduction and
after reading the explanation for each
enter the total on Form 2106,
column.
Note. If your vehicle was used more
line 31 . . . . . . . . . . . . . . . .
Column (a) —200% declining
than 50% for business in the year it
was placed in service and used 50%
balance method. You can use
or less in a later year, part of the
Line 32. To figure the basis for
column (a) only if the business use
depreciation and section 179
depreciation, multiply line 30 by the
percentage on line 14 is more than
deduction previously claimed may
percentage on line 14. From that
50%. Of the three depreciation
have to be added back to your
result, subtract the full amount of any
methods, the 200% declining balance
section 179 deduction and special
method may give you the largest
income in the later year. Figure the
depreciation allowance.
depreciation deduction for the first 3
amount to be included in income on
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