Increased
section 179 deduction dollar
limit. The maximum amount
you can elect to deduct for most
section 179 property you placed
in service during 2004 is
$102,000. This limit is reduced
by the amount by which the cost
of the property placed in
service during the tax year
exceeds $410,000. See
Dollar Limits under
How
Much Can You Deduct
in chapter 2.
Section 179
deduction limit for sport
utility and certain other
vehicles. The maximum
section 179 expense deduction
for sport utility vehicles and
certain other vehicles placed in
service after October 22, 2004,
is $25,000. For more
information, see
Section 179 Deduction Limit for
Sport Utility and Certain Other
Vehicles in chapter
2.
Bonus
depreciation for aircraft. Certain
non-commercial aircraft placed
in service before January 1,
2006, are eligible for the
special depreciation allowances.
See
What Is Qualified Property
in chapter 3.
Election out
for qualified New York Liberty
Zone (Liberty Zone) leasehold
improvement property. . You
can elect not to treat certain
qualified Liberty Zone leasehold
improvement property as 5-year
property. For more information,
see
Which Property Class Applies
Under GDS in chapter
4.
Recovery
period for qualified leasehold
improvement and qualified
restaurant property. Qualified
leasehold improvement property
and qualified restaurant
property placed in service after
October 22, 2004, and before
January 1, 2006, are treated as
15-year property under MACRS.
See
Figuring Depreciation Under
MACRS in chapter 4.
Depreciation
deduction for property acquired
in a nontaxable exchange. New
guidance has been issued for
depreciating MACRS property
acquired after February 27, 2004
in a like-kind exchange or
involuntary conversion. See
Figuring the Deduction for
Property Acquired in a
Nontaxable Exchange
in chapter 4.
Depreciation
limits on business vehicles. The
total section 179 deduction and
depreciation (including the
special depreciation allowance)
you can deduct for a passenger
automobile (that is not an
electric vehicle or a truck or
van) you use in your business
and first placed in service in
2004 is generally $10,610. The
maximum deduction for an
electric vehicle is generally
$31,830. The maximum deduction
you can take for a truck or van
you use in your business and
first placed in service in 2004
is generally $10,910. See
Maximum Depreciation Deduction
in chapter 5.
Photographs
of missing children. The
Internal Revenue Service is a
proud partner with the National
Center for Missing and Exploited
Children. Photographs of missing
children selected by the Center
may appear in this publication
on pages that would otherwise be
blank. You can help bring these
children home by looking at the
photographs and calling
1-800-THE-LOST (1-800-843-5678)
if you recognize a child.
Additional
special depreciation
allowances. The additional
special depreciation allowances
will not apply to most property
placed in service after December
31, 2004. For more information,
see
Claiming the Special
Depreciation Allowance (or
Liberty Zone Depreciation
Allowance) in
chapter 3.
This publication explains how
you can recover the cost of
business or income-producing
property through deductions for
depreciation (the special
depreciation allowance, the
special Liberty Zone
depreciation allowance, and
deductions under the Modified
Accelerated Cost Recovery
System). It also explains how
you can elect to take a section
179 deduction, instead of
depreciation deductions, for
certain property and the
additional rules for listed
property. In addition, the
publication describes how to
figure depreciation and how to
fill out Form 4562, Depreciation
and Amortization.
The depreciation methods
discussed in this publication
generally do not apply to
property placed in service
before 1987. If you want
information about depreciating
such property, see Publication
534.
Definitions. Many of
the terms used in this
publication are defined in
the
Glossary
near the end of the
publication. Glossary terms
used in each discussion
under the major headings are
listed before the beginning
of each discussion
throughout the publication.
Do you need
a different publication?
The following table shows
where you can get more
detailed information when
depreciating certain types
of property.
For
information
on
depreciating: |
See
Publication: |
|
A car |
463, Travel,
Entertainment,
Gift, and Car
Expenses |
|
Residential
rental property
|
527, Residential
Rental Property
|
|
Office space in
your home |
587, Business
Use of Your Home
(Including Use
by Daycare
Providers) |
|
Farm property
|
225, Farmer's
Tax Guide
|
Comments
and suggestions.
We welcome your comments
about this publication and
your suggestions for future
editions.
You can write to us at the
following address:
Internal Revenue Service
Business Forms and
Publications Branch
SE:W:CAR:MP:T:B
1111 Constitution Ave.
NW, IR-6406
Washington, DC 20224
We respond to many letters
by telephone. Therefore, it
would be helpful if you
would include your daytime
phone number, including the
area code, in your
correspondence.
You can email us at
*taxforms@irs.gov. (The
asterisk must be included in
the address.) Please put “
Publications
Comment” on the
subject line. Although we
cannot respond individually
to each email, we do
appreciate your feedback and
will consider your comments
as we revise our tax
products.
