J.K. Lasser's Your Income Tax 2013: For Preparing Your 2012 Tax Return

43.5 MACRS Rates for Cars, Trucks, and Vans

Business autos, trucks, and vans are technically in a five-year MACRS class (42.4), but because of the half-year or mid-quarter convention and the annual deduction ceilings (43.3), the minimum depreciation period is six years.

Accelerated MACRS rate allowed only if business use in the first year exceeds 50%.

To use accelerated MACRS rates, you must meet the more-than-50%-business-use test (43.3) in the year the vehicle is placed in business service. Generally, the accelerated MACRS rate is based on the 200% declining balance method, but as shown on Table 43-4 (half-year convention) or Table 43-5 (mid-quarter convention), a 150% declining balance rate may be elected, which may be advantageous when you are subject to the alternative minimum tax (23.2).

Table 43-4 MACRS Deduction: Half-Year Convention

Year—	200% Rate	150% Rate
1	20.00%	15.00%
2	32.00	25.50
3	19.20	17.85
4	11.52	16.66
5	11.52	16.66
6	5.76	8.33

Table 43-5 MACRS Deduction: Mid-Quarter Convention

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Capital Improvements

A capital improvement to a business vehicle is depreciable under MACRS in the year the improvement is made. The MACRS deductions for the improvement and the vehicle are considered as a unit for purposes of applying ...