The Section 179 deduction is also allowed for business vehicles.
The Section 179 deduction is also allowed for business vehicles. The annual deduction for depreciation, including any Section 179 deduction or special depreciation allowance is limited to statutory amounts. The 50% and 100% special depreciation allowance does not apply to IRC section 280F property. Instead, these limits are increased by $8,000 for the first year.
The annual deduction is the lesser of:
- The vehicle’s basis multiplied by the business use percentage multiplied by the applicable depreciation percentage, or
- The IRC section 280F limit multiplied by the business percentage.
The IRC section 280F limits are adjusted each year for inflation. The chart in the next column reflects the new IRC section 280F limits for 2022 in comparison to 2021.