43.7 Depreciation for Year Vehicle Is Disposed Of
If you dispose of your car, truck, or van before the end of the six-year recovery period, you are allowed a partial depreciation deduction for the year of disposition. The deduction depends on the depreciation method and convention being used.
If you were depreciating the vehicle under the half-year convention (43.5), you may claim for the year of disposition 50% of the deduction that would be allowed for the full year under the 200% or 150% declining balance method, or the straight-line method.
If you were depreciating the vehicle under the mid-quarter convention (43.5), your deduction for the year of disposition depends on the month of disposition. You deduct 87.5% of the full-year mid-quarter convention deduction (43.5) if the disposition occurred in October–December. If the disposition is in July–September, 62.5% of the full year’s deduction is allowed. Your deduction is 37.5% of the full-year deduction if the disposition is in April–June, or 12.5% of the full-year deduction if the disposition is in January–March.
Get J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.