What is the depreciation rate for commercial vehicles?

Answer 1

There is no depreciation category for "commercial vehicles," as it would have to include any vehicle that could be used in a trade or business, from a little red wagon to an 18-wheeler.

Instead, here are categories that may contain the answer to your question. The information is for the 2013 tax year.

Cars and Light Trucks (6,000 pounds or less): There are limitations as to how much can be deducted each year, depending on whether or not you take the available 50% bonus depreciation. These limits are irrespective of cost, and are slightly different for passenger cars and for light trucks and vans.

Passenger cars Regular Bonus

First year $3,160 $11,160

Second year 5,100 5,100

Third year 3,050 3,050

Subsequent years 1,875 1,875

Light trucks & vans

First year $3,360 $11,360

Second year 5,400 5,400

Third year 3,250 3,250

Subsequent years 1,975 1,975

Trucks & van over 6,000 pounds and certain qualified nonpersonal use vehicles (modified, such as with prominent advertising, to make more than minimal personal use unlikely). These vehicles are typically depreciated under the Modified Accelerated Cost Recovery System (MACRS) as 5-year property using the Double Declining Balance (DDB) method, mid-year convention. In short, the first year is 1/2 year of DDB depreciation (20% of cost), second year 32%, third year 19.2%, fourth year 11.52%, year five 11.52%, and year six 1/2 year 5.76%. Some or all of the cost may be eligible for Section 179 depreciation, an amount deducted all in one tax year, but which may not generate a tax loss. Then there are various bonus depreciation opportunities in different tax years.

As you can see, there is no simple answer to your question. I strongly suggest you consult a CPA with your particular situation and get it set up right, at least for the first year.