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Turbo Tax

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Turbo Tax

Turbo tax Accelerated Cost Recovery System (ACRS) Table of Contents Topics - This chapter discusses: Useful Items - You may want to see: ACRS Defined What Can and Cannot Be Depreciated Under ACRSRecovery Property Nonrecovery Property How To Figure the DeductionUnadjusted Basis Classes of Recovery Property Recovery Periods Alternate ACRS Method (Modified Straight Line Method) ACRS Deduction in Short Tax Year DispositionsEarly dispositions of ACRS property other than 15-, 18-, or 19-year real property. Turbo tax Dispositions — mass asset accounts. Turbo tax Early dispositions — 15-year real property. Turbo tax Early dispositions — 18- and 19-year real property. Turbo tax Depreciation Recapture Topics - This chapter discusses: The definition of ACRS What can and cannot be depreciated under ACRS How to figure the deduction Dispositions Useful Items - You may want to see: Publication 544 Sales and Other Dispositions of Assets 551 Basis of Assets 583 Starting a Business and Keeping Records Form (and Instructions) 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization The Accelerated Cost Recovery System (ACRS) applies to property first used before 1987. Turbo tax It is the name given to tax rules for getting back (recovering) through depreciation deductions the cost of property used in a trade or business or to produce income. Turbo tax These rules are mandatory and generally apply to tangible property placed in service after 1980 and before 1987. Turbo tax If you placed property in service during this period, you must continue to figure your depreciation under ACRS. Turbo tax If you used listed property placed in service after June 18, 1984, less than 50% for business in 1995, see Predominant Use Test in chapter 3. Turbo tax Listed property includes cars, other means of transportation, and certain computers. Turbo tax Any additions or improvements placed in service after 1986, including any components of a building (such as plumbing, wiring, storm windows, etc. Turbo tax ), are depreciated using MACRS, discussed in chapter 3 of Publication 946. Turbo tax It does not matter that the underlying property is depreciated under ACRS or one of the other methods. Turbo tax ACRS Defined ACRS consists of accelerated depreciation methods and an alternate ACRS method that could have been elected. Turbo tax The alternate ACRS method used a recovery percentage based on a modified straight line method. Turbo tax The law prescribes fixed percentages to be uses for each class of property. Turbo tax Property depreciable under ACRS is called recovery property. Turbo tax The recovery class of property determines the recovery period. Turbo tax Generally, the class life of property places it in a 3-year, 5-year, 10-year, 15-year, 18-year, or 19-year recovery class. Turbo tax Under ACRS, the prescribed percentages are used to recover the unadjusted basis of recovery property. Turbo tax To figure a depreciation deduction, you multiply the prescribed percentage for the recovery class by the unadjusted basis of the recovery property. Turbo tax You must continue to figure your depreciation under ACRS for property placed in service after 1980 and before 1987. Turbo tax For property you placed in service after 1986, you must use MACRS, discussed in chapter 3 of Publication 946. Turbo tax What Can and Cannot Be Depreciated Under ACRS ACRS applies to most depreciable tangible property placed in service after 1980 and before 1987. Turbo tax It includes new or used and real or personal property. Turbo tax The property must be for use in a trade or business or for the production of income. Turbo tax Property you acquired before 1981 or after 1986 is not ACRS recovery property. Turbo tax For information on depreciating property acquired before 1981, see chapter 2. Turbo tax For information on depreciating property acquired after 1986, see chapter 3 of Publication 946. Turbo tax Recovery Property Recovery property under ACRS is tangible depreciable property placed in service after 1980 and before 1987. Turbo tax It generally includes new or used property that you acquired after 1980 and before 1987 for use in your trade or business or for the production of income. Turbo tax Nonrecovery Property You cannot use ACRS for property you placed in service before 1981 or after 1986. Turbo tax Nonrecovery property also includes: Intangible property, Property you elected to exclude from ACRS that is properly depreciated under a method of depreciation that is not based on a term of years, Certain public utility property, and Certain property acquired and excluded from ACRS because of the antichurning rules. Turbo tax Intangible property. Turbo tax   Intangible property is not depreciated under ACRS. Turbo tax Property depreciated under methods not expressed in a term of years. Turbo tax   Certain property depreciated under a method not expressed in a term of years is not depreciated under ACRS. Turbo tax This included any property: If you made an irrevocable election to exclude such property, and In the first year that you could have claimed depreciation, you properly used the unit-of-production method or any method of depreciation not expressed in a term of years (not including the retirement-replacement-betterment method). Turbo tax Public utility property. Turbo tax   Public utility property for which the taxpayer does not use a normalization method of accounting is excluded from ACRS and is subject to depreciation under a special rule. Turbo tax Additions or improvements to ACRS property after 1986. Turbo tax   Any additions or improvements placed in service after 1986, including any components of a building (plumbing, wiring, storm windows, etc. Turbo tax ) are depreciated using MACRS, discussed in chapter 3 of Publication 946. Turbo tax It does not matter that the underlying property is depreciated under ACRS or one of the other methods. Turbo tax How To Figure the Deduction After you determine that your property can be depreciated under ACRS, you are ready to figure your deduction. Turbo tax Because the conventions are built into the percentage table rates, you only need to know the following: The unadjusted basis of your recovery property, The classes of recovery property, The recovery periods, and Whether to use the prescribed percentages based on accelerated methods or percentages based on using the alternate ACRS method. Turbo tax Unadjusted Basis To figure your ACRS deduction, you multiply the unadjusted basis in your recovery property by its applicable percentage for the year. Turbo tax Unadjusted basis is the same amount you would use to figure gain on a sale, but it is figured without taking into account any depreciation taken in earlier years. Turbo tax However, reduce your original basis by the amount of amortization taken on the property and by any section 179 deduction claimed as discussed in chapter 2 of Publication 946. Turbo tax If you buy property, your unadjusted basis is usually its cost minus any amortized amount and minus any section 179 deduction elected. Turbo tax If you acquire property in some other way, such as by inheriting it, getting it as a gift, or building it yourself, you figure your unadjusted basis under other rules. Turbo tax See Publication 551. Turbo tax Classes of Recovery Property All recovery property under ACRS is in one of the following classes. Turbo tax The class for your property was determined when you began to depreciate it. Turbo tax 3-Year Property 3-year property includes automobiles, light-duty trucks (actual unloaded weight less than 13,000 pounds), and tractor units for use over-the-road. Turbo tax Race horses over 2 years old when placed in service are 3-year property. Turbo tax Any other horses over 12 years old when you placed them in service are also included in the 3-year property class. Turbo tax The ACRS percentages for 3-year recovery property are: Recovery Period Percentage 1st year 25% 2nd year 38% 3rd year 37% If you used the percentages above to depreciate your 3-year recovery property, your property, except for certain passenger automobiles, is fully depreciated. Turbo tax You cannot claim depreciation for this property after 1988. Turbo tax 5-Year Property 5-year property includes computers, copiers, and equipment, such as office furniture and fixtures. Turbo tax It also includes single purpose agricultural or horticultural structures and petroleum storage facilities (other than buildings and their structural components). Turbo tax The ACRS percentages for 5-year recovery property are: Recovery period Percentage 1st year 15% 2nd year 22% 3rd through 5th year 21% If you used the percentages above to depreciate your 5-year recovery property, it is fully depreciated. Turbo tax You cannot claim depreciation for this property after 1990. Turbo tax 10-Year Property 10-year property includes certain real property such as theme-park structures and certain public utility property. Turbo tax Manufactured homes (including mobile homes) and railroad tank cars are also 10-year property. Turbo tax You do not treat a building, and its structural components, as 10-year property by reason of a change in use after you placed the property in service. Turbo tax For example, a building (15-year real property) that was placed in service in 1981 and was converted to a theme-park structure in 1986 remains 15-year real property. Turbo tax The ACRS percentages for 10-year recovery property are: Recovery Period Percentage 1st year 8% 2nd year 14% 3rd year 12% 4th through 6th year 10% 7th through 10th year 9% If you used the percentages above, you cannot claim depreciation for this property after 1995. Turbo tax Example. Turbo tax On April 21, 1986, you bought and placed in service a new mobile home for $26,000 to be used as rental property. Turbo tax You paid $10,000 cash and signed a note for $16,000 giving you an unadjusted basis of $26,000. Turbo tax On June 8, 1986, you bought and placed in service a used mobile home for use as rental property at a total cost of $11,500. Turbo tax The total unadjusted basis of your 10-year recovery property placed in service in 1986 was $37,500 ($26,000 + $11,500). Turbo tax Your ACRS deduction was $3,000 (8% × $37,500). Turbo tax In 1987, your ACRS deduction was $5,250 (14% × $37,500). Turbo tax In 1988, your ACRS deduction was $4,500 (12% × $37,500). Turbo tax In 1989, 1990, and 1991, your ACRS deduction was $3,750 (10% × $37,500). Turbo tax In 1992, 1993, 1994, and 1995 your deduction for each year is $3,375 (9% × $37,500). Turbo tax 15-Year Real Property 15-year real property is real property that is recovery property placed in service before March 16, 1984. Turbo tax It includes all real property, such as buildings, other than that designated as 5-year or 10-year property. Turbo tax Unlike the 3-, 5-, or 10-year classes of property, the percentages for 15-year real property depend on when you placed the property in service during your tax year. Turbo tax You could group 15-year real property by month and year placed in service. Turbo tax In Table 1, at the end of this publication in the Appendix, find the month in your tax year that you placed the property in service in your trade or business or for the production of income. Turbo tax You use the percentages listed under that month for each year of the recovery period to determine your depreciation deduction each year. Turbo tax Example. Turbo tax On March 5, 1984, you placed an apartment building in service in your business. Turbo tax It is 15-year real property. Turbo tax After subtracting the value of the land, your unadjusted basis in the building is $250,000. Turbo tax You use the calendar year as your tax year. Turbo tax March is the third month of your tax year. Turbo tax Your ACRS deduction for 1984 was $25,000 (10% × $250,000). Turbo tax For 1985, the percentage for the third month of the second year of the recovery period is 11%. Turbo tax Your deduction was $27,500 (11% × $250,000). Turbo tax For the third, fourth, and fifth years of the recovery period (1986, 1987, and 1988), the percentages are 9%, 8%, and 7%. Turbo tax For 1989 through 1992, the percentage for the third month is 6%. Turbo tax Your deduction each year is $15,000 (6% × $250,000). Turbo tax For 1993, 1994, and 1995, the percentage for the third month is 5%. Turbo tax Your depreciation deduction is $12,500 (5% × $250,000) for 1993, 1994, and 1995. Turbo tax Low-Income Housing Low-income housing that was assigned a 15-year recovery period under ACRS includes the following types of property: Federally assisted housing projects where the mortgage is insured under section 221(d)(3) or 236 of the National Housing Act, or housing financed or assisted by direct loan or tax abatement under similar provisions of state or local laws. Turbo tax Low-income rental housing for which a depreciation deduction for rehabilitation expenditures is allowed. Turbo tax Low-income rental housing held for occupancy by families or individuals eligible to receive subsidies under section 8 of the United States Housing Act of 1937, as amended, or under the provisions of state or local laws that authorize similar subsidies for low-income families. Turbo tax Housing financed or assisted by direct loan or insured under Title V of the Housing Act of 1949. Turbo tax The ACRS percentages for low-income housing real property, like the regular 15-year real property percentages, depend on when you placed the property in service. Turbo tax Find the month in your tax year in Table 2 or 3 at the end of this publication in the Appendix that you first placed the property in service as rental housing. Turbo tax Use the percentages listed under that month for each year of the recovery period. Turbo tax Table 2 shows percentages for low-income housing placed in service before May 9, 1985. Turbo tax Table 3 shows percentages for low-income housing placed in service after May 8, 1985, and before 1987. Turbo tax Example. Turbo tax In May 1986, you acquired and placed in service a house that qualified as low-income rental housing under item 3) of the above listing. Turbo tax You use the calendar year as your tax year. Turbo tax You use Table C–3 because the property was placed in service after May 8, 1985. Turbo tax Your unadjusted basis for the property, not including the land, was $59,000. Turbo tax Your deduction for 1986 through 2001 is shown in the following table. Turbo tax Year Rate Deduction 1986 8. Turbo tax 9% $5,251 1987 12. Turbo tax 1% 7,139 1988 10. Turbo tax 5% 6,195 1989 9. Turbo tax 1% 5,369 1990 7. Turbo tax 9% 4,661 1991 6. Turbo tax 9% 4,071 1992 5. Turbo tax 9% 3,481 1993 5. Turbo tax 2% 3,068 1994 4. Turbo tax 6% 2,714 1995 4. Turbo tax 6% 2,714 1996 4. Turbo tax 6% 2,714 1997 4. Turbo tax 6% 2,714 1998 4. Turbo tax 6% 2,714 1999 4. Turbo tax 5% 2,655 2000 4. Turbo tax 5% 2,655 2001 1. Turbo tax 5% 885 18-Year Real Property 18-year real property is real property that is recovery property placed in service after March 15, 1984, and before May 9, 1985. Turbo tax It includes real property, such as buildings, other than that designated as 5-year, 10-year, 15-year real property, or low-income housing. Turbo tax The ACRS percentages for 18-year real property depend on when you placed the property in service in your trade or business or for the production of income during your tax year. Turbo tax There are also tables for 18-year real property in the Appendix. Turbo tax Table 4 shows the percentages for 18-year real property you placed in service after June 22, 1984, and before May 9, 1985. Turbo tax Table 5 is for 18-year real property placed in service after March 15, 1984, and before June 23, 1984. Turbo tax Find the month in your tax year that you placed the property in service in a trade or business or for the production of income. Turbo tax Use the percentages listed under that month for each year of the recovery period. Turbo tax Example. Turbo tax On April 28, 1985, you bought and placed in service a rental house. Turbo tax The house, not including the land, cost $95,000. Turbo tax This is your unadjusted basis for the house. Turbo tax You use the calendar year as your tax year. Turbo tax Because the house was placed in service after June 22, 1984, and before May 9, 1985, it is 18-year real property. Turbo tax You use Table 4 to figure your deduction for the house. Turbo tax April is the fourth month of your tax year. Turbo tax Your deduction for 1985 through 2003 is shown in the following table. Turbo tax Year Rate Deduction 1985 7. Turbo tax 0% $6,650 1986 9. Turbo tax 0% 8,550 1987 8. Turbo tax 0% 7,600 1988 7. Turbo tax 0% 6,650 1989 7. Turbo tax 0% 6,650 1990 6. Turbo tax 0% 5,700 1991 5. Turbo tax 0% 4,750 1992 5. Turbo tax 0% 4,750 1993 5. Turbo tax 0% 4,750 1994 5. Turbo tax 0% 4,750 1995 5. Turbo tax 0% 4,750 1996 5. Turbo tax 0% 4,750 1997 5. Turbo tax 0% 4,750 1998 4. Turbo tax 0% 3,800 1999 4. Turbo tax 0% 3,800 2000 4. Turbo tax 0% 3,800 2001 4. Turbo tax 0% 3,800 2002 4. Turbo tax 0% 3,800 2003 1. Turbo tax 0% 950 19-Year Real Property 19-year real property is real property that is recovery property placed in service after May 8, 1985, and before 1987. Turbo tax It includes all real property, other than that designated as 5-year, 10-year, 15-year, or 18-year real property, or low-income housing. Turbo tax The ACRS percentages for 19-year real property depend on when you placed the property in service in a trade or business or for the production of income during your tax year. Turbo tax Table 6 shows the percentages for 19-year real property. Turbo tax You find the month in your tax year that you placed the property in service. Turbo tax You use the percentages listed under that month for each year of the recovery period. Turbo tax Recovery Periods Each item of recovery property is assigned to a class of property. Turbo tax The classes of recovery property establish the recovery periods over which the unadjusted basis of items in a class is recovered. Turbo tax The classes of property are: 3-Year property 5-Year property 10-Year property 15-Year real property Low-income housing 18-Year real property 19-Year real property Alternate ACRS Method (Modified Straight Line Method) ACRS provides an alternate ACRS method that could be elected. Turbo tax This alternate ACRS method uses a recovery percentage based on a modified straight line method. Turbo tax This alternate ACRS method generally uses percentages other than those from the tables. Turbo tax If you elected the alternate ACRS method, you determine the recovery period by using the following schedule. Turbo tax This schedule is for other than 18- and 19-year real property and low-income housing: In the case of: You could have elected a recovery period of: 3-year property 3, 5, or 12 years 5-year property 5, 12, or 25 years 15-year real property 15, 35, or 45 years Percentages. Turbo tax   The straight-line percentages for the alternate ACRS method are: Recovery Period Percentage 5 years 20. Turbo tax 00% 10 years 10. Turbo tax 00% 12 years 8. Turbo tax 333% 15 years 6. Turbo tax 667% 25 years 4. Turbo tax 00% 35 years 2. Turbo tax 857%   You apply the percentage to the unadjusted basis(defined earlier) of the property to figure your ACRS deduction. Turbo tax There are tables for 18- and 19-year real property later in this publication in the Appendix. Turbo tax For 15-year real property, see 15-year real property, later. Turbo tax 3-, 5-, and 10-year property. Turbo tax   If you elected to use an alternate recovery percentage, you have to use the same recovery percentage for all property in that class that you placed in service in that tax year. Turbo tax This applies throughout the recovery period you selected. Turbo tax Half-year convention. Turbo tax   If you elected the alternate method, only a half-year of depreciation was deducted for the year you placed the property in service. Turbo tax This applied regardless of when in the tax year you placed the property in service. Turbo tax For each of the remaining years in the recovery period, you take a full year's deduction. Turbo tax If you hold the property for the entire recovery period, a half-year of depreciation is allowable for the year following the end of the recovery period. Turbo tax Example. Turbo tax You operate a small upholstery business. Turbo tax On March 19, 1986, you bought and placed in service a $13,000 light-duty panel truck to be used in your business and a $500 electric saw. Turbo tax You elected to use the alternate ACRS method. Turbo tax You did not elect to take a section 179 deduction. Turbo tax You decided to recover the cost of the truck, which is 3-year recovery property, over 5 years. Turbo tax The saw is 5-year property, but you decided to recover its cost over 12 years. Turbo tax For 1986, your ACRS deduction reflected the half-year convention. Turbo tax In the first year, you deducted half of the amount determined for a full year. Turbo tax Your ACRS deduction for 1986 is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600 Half-year convention -½ of $2,600= $1,300. Turbo tax 00     Electric saw   12 years straight line = 8. Turbo tax 333% 8. Turbo tax 333% ÷ $500 = $41. Turbo tax 67 Half-year convention -½ of $41. Turbo tax 67= 20. Turbo tax 84 Total ACRS deduction for 1986 $1,320. Turbo tax 84       You take a full year of depreciation for both the truck and the saw for the years 1987 through 1990. Turbo tax Your ACRS deduction for each of those years is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600     Electric saw     12 years straight line = 8. Turbo tax 333% 8. Turbo tax 333% ÷ $500 = $41. Turbo tax 67 Total annual ACRS deduction for 1987 through 1990 $2,641. Turbo tax 67       In 1991, you take a half-year of depreciation for the truck and a full year of depreciation for the saw. Turbo tax Your ACRS deduction for 1991 is as follows: Light-duty truck   5 years straight line = 20% 20% ÷ $13,000 = $2,600 Half-year convention -½ of $2,600= $1,300. Turbo tax 00     Electric saw   12 years straight line = 8. Turbo tax 333% 8. Turbo tax 333% ÷ $500 = $41. Turbo tax 67 Total ACRS deduction for 1991 $1,341. Turbo tax 67       The truck is fully depreciated after 1991. Turbo tax You take a full year of depreciation for the saw for the years 1992 through 1997. Turbo tax Your ACRS deduction for each of those years is as follows: Electric saw     12 years straight line = 8. Turbo tax 333% 8. Turbo tax 333% ÷ $500 = $41. Turbo tax 67 Total annual ACRS deduction for 1992 through 1997 $41. Turbo tax 67       You take a half-year of depreciation for the saw for 1998. Turbo tax Your ACRS deduction for 1998 is as follows: Electric saw   12 years straight line = 8. Turbo tax 333% 8. Turbo tax 333% ÷ $500 = $41. Turbo tax 67 Half-year convention -½ of $41. Turbo tax 67= 20. Turbo tax 84 Total ACRS deduction for 1998 $20. Turbo tax 84       The saw is fully depreciated after 1998. Turbo tax 15-year real property. Turbo tax   Under ACRS, you could also elect to use the alternate ACRS method for 15-year real property. Turbo tax The alternate ACRS method allows you to depreciate your 15-year real property using the straight line ACRS method over the alternate recovery periods of 15, 35, or 45 years. Turbo tax If you selected a 15-year recovery period, you use the percentage (6. Turbo tax 667%) from the schedule above. Turbo tax You prorate this percentage for the number of months the property was in service in the first year. Turbo tax If you selected a 35- or 45-year recovery period, you use either Table 11 or 15. Turbo tax Alternate periods for 18-year real property. Turbo tax   For 18-year real property, the alternate recovery periods are 18, 35, or 45 years. Turbo tax The percentages for 18-year real property under the alternate method are in Tables 7, 8, 10, 11, 14, and 15 in the Appendix. Turbo tax There are two tables for each alternate recovery period. Turbo tax One table shows the percentage for property placed in service after June 22, 1984. Turbo tax The other table has the percentages for property placed in service after March 15, 1984, and before June 23, 1984. Turbo tax Alternate periods for 19-year real property. Turbo tax   For 19-year real property, the alternate recovery periods are 19, 35, or 45 years. Turbo tax If you selected a 19-year recovery period, use Table 9 to determine your deduction. Turbo tax If you select a 35- or 45-year recovery period, use either Table 13 or 14. Turbo tax Example. Turbo tax You placed in service an apartment building on August 3, 1986. Turbo tax The building is 19-year real property. Turbo tax The sales contract allocated $300,000 to the building and $100,000 to the land. Turbo tax You use the calendar year as your tax year. Turbo tax You chose the alternate ACRS method over a recovery period of 35 years. Turbo tax For 1986, you figure your ACRS deduction usingTable 13. Turbo tax August is the eighth month of your tax year. Turbo tax The percentage from Table 13 for the eighth month is 1. Turbo tax 1%. Turbo tax Your deduction was $3,300 ($300,000 ÷ 1. Turbo tax 1%). Turbo tax The deduction rate from ACRS Table 13 for years 2 through 20 is 2. Turbo tax 9% so that your deduction in 1987 through 2005 is $8,700 ($300,000 ÷ 2. Turbo tax 9%). Turbo tax Alternate periods for low-income housing. Turbo tax   For low-income housing, the alternate recovery periods are 15, 35, or 45 years. Turbo tax If you selected a 15-year period for this property, use 6. Turbo tax 667% as the percentage. Turbo tax If you selected a 35- or 45-year period, use either Table 11, 12, or 15. Turbo tax Election. Turbo tax   You had to make the election to use the alternate ACRS method by the return due date (including extensions) for the tax year you placed the property in service. Turbo tax Revocation of election. Turbo tax   Your election to use an alternate ACRS method, once made, can be changed only with the consent of the Commissioner. Turbo tax The Commissioner grants consent only in extraordinary circumstances. Turbo tax Any request for a revocation will be considered a request for a ruling. Turbo tax ACRS Deduction in Short Tax Year For a tax year that is less than 12 months, the ACRS deduction is prorated on a 12-month basis. Turbo tax Figure the amount of the ACRS deduction for a short tax year as follows: First, you figure the ACRS deduction for a full year. Turbo tax You figure this by multiplying the unadjusted basis by the recovery percentage. Turbo tax You then multiply the ACRS deduction determined for a full tax year by a fraction. Turbo tax The numerator (top number) of the fraction is the number of months in the short tax year and the denominator (bottom number) is 12. Turbo tax For example, a corporation placed in service in June 1986 an item of 3-year property with an unadjusted basis of $10,000. Turbo tax The corporation files a tax return, because of a change in its accounting period, for the 6-month short tax year ending June 30, 1986. Turbo tax The full year's ACRS deduction for this item is $2,500 ($10,000 ÷ 25%), the first year percentage from the 3-year table. Turbo tax The ACRS deduction for the short tax year is $1,250 ($2,500 ÷ 6/12). Turbo tax You use the full ACRS percentages during the remaining years of the recovery period. Turbo tax For the first tax year after the recovery period, the unrecovered basis will be deductible. Turbo tax Exception. Turbo tax   For the tax year in which you placed 15-, 18-, or 19-year real property in service or in the tax year you dispose of it, you compute the ACRS deduction for the number of months that the property is in service during that tax year. Turbo tax You compute the number of months using either a full month or mid-month convention. Turbo tax This is true regardless of the number of months in the tax year and the recovery period and method used. Turbo tax Dispositions A disposition is the permanent withdrawal of property from use in your trade or business or in the production of income. Turbo tax You can make a withdrawal by sale, exchange, retirement, abandonment, or destruction. Turbo tax You generally recognize gain or loss on the disposition of an asset by sale. Turbo tax However, nonrecognition rules can allow you to postpone some gain. Turbo tax See Publication 544. Turbo tax If you physically abandon property, you can deduct as a loss the adjusted basis of the asset at the time of its abandonment. Turbo tax Your intent must be to discard the asset so that you will not use it again or retrieve it for sale, exchange, or other disposition. Turbo tax Early dispositions. Turbo tax   The disposal of an asset before the end of its specified recovery period, is referred to as an early disposition. Turbo tax When an early disposition occurs, the depreciation deduction in the year of disposition depends on the class of property involved. Turbo tax Early dispositions of ACRS property other than 15-, 18-, or 19-year real property. Turbo tax   Generally, you get no ACRS deduction for the tax year in which you dispose of or retire recovery property, except for 15-, 18-, and 19-year real property. Turbo tax This means there is no depreciation deduction under ACRS in the year you dispose of or retire any of your 3-, 5-, or 10-year recovery property. Turbo tax Dispositions — mass asset accounts. Turbo tax   The law provides a special rule to avoid the calculation of gain on the disposition of assets from mass asset accounts. Turbo tax A mass asset account includes items usually minor in value in relation to the group, numerous in quantity, impractical to separately identify, and not usually accounted for on a separate basis, but on a total dollar value. Turbo tax Examples of mass assets include minor items of office, plant, and store furniture and fixtures. Turbo tax   Under the special rule, if you elected to use a mass asset account, you recognize gain to the extent of the proceeds from the disposition of the asset. Turbo tax You leave the unadjusted basis of the property in the account until recovered in future years. Turbo tax If you did this, include the total proceeds realized from the disposition in income on the tax return for the year of disposition. Turbo tax Early dispositions — 15-year real property. Turbo tax   If you dispose of 15-year real property, you base your ACRS deduction for the year of disposition on the number of months in use. Turbo tax You use a full-month convention. Turbo tax For a disposition at any time during a particular month before the end of the recovery period, no deduction is allowed for the month of disposition. Turbo tax This applies whether you use the regular ACRS method or elected the alternate ACRS method. Turbo tax Example. Turbo tax You purchased and placed in service a rental house on March 2, 1984, for $98,000 (not including the cost of land). Turbo tax You file your return based on a calendar year. Turbo tax Your rate from Table 1 for the third month is 10%. Turbo tax Your ACRS deduction for 1984 was $9,800 ($98. Turbo tax 000 ÷ 10%). Turbo tax For 1985 through 1988, you figured your ACRS deductions using 11%, 9%, 8%, and 7% ÷ $98,000. Turbo tax For 1989 through 1992, you figured your ACRS deductions using 6% for each year. Turbo tax The deduction each year was $98,000 ÷ 6%. Turbo tax For 1993 and 1994, the ACRS deduction is ($98,000 ÷ 5%) $4,900 for each year. Turbo tax You sell the house on June 1, 1995. Turbo tax You figure your ACRS deduction for 1995 for the full year and then prorate that amount for the months of use. Turbo tax The full ACRS deduction for 1995 is $4,900 ($98,000 ÷ 5%). Turbo tax You then prorate this amount to the 5 months in 1995 during which it was rented. Turbo tax Your ACRS deduction for 1995 is $2,042 ($4,900 ÷ 5/12). Turbo tax Early dispositions — 18- and 19-year real property. Turbo tax   If you dispose of 18- or 19-year real property, you base your ACRS deduction for the year of disposition on the number of months in use. Turbo tax For 18-year property placed in service before June 23, 1984, use a full-month convention on a disposition. Turbo tax For 18-year property placed in service after June 22, 1984, and for 19-year property, determine the number of months in use by using the mid-month convention. Turbo tax Under the mid-month convention,treat real property disposed of any time during a month as disposed of in the middle of that month. Turbo tax Count the month of disposition as half a month of use. Turbo tax Example. Turbo tax You purchased and placed in service a rental house on July 2, 1984, for $100,000 (not including the cost of land). Turbo tax You file your return based on a calendar year. Turbo tax Your rate from Table 4 for the seventh month is 4%. Turbo tax You figured your ACRS deduction for 1984 was $4,000 ($100,000 ÷ 4%). Turbo tax In 1985 through 1994, your ACRS deductions were 9%, 8%, 8%, 7%, 6%, 6%, 5%, 5%, and 5% ÷ $100,000. Turbo tax You sell the house on September 24, 1995. Turbo tax Figure your ACRS deduction for 1995 for the months of use. Turbo tax The full ACRS deduction for 1995 is $5,000 ($100,000 ÷ 5%). Turbo tax Prorate this amount for the 8. Turbo tax 5 months in 1995 that you held the property. Turbo tax Under the mid-month convention, you count September as half a month. Turbo tax Your ACRS deduction for 1995 is $3,542 ($5,000 ÷ 8. Turbo tax 5/12). Turbo tax Depreciation Recapture If you dispose of property depreciated under ACRS that is section 1245 recovery property, you will generally recognize gain or loss. Turbo tax Gain recognized on a disposition is ordinary income to the extent of prior depreciation deductions taken. Turbo tax This recapture rule applies to all personal property in the 3-year, 5-year, and 10-year classes. Turbo tax You recapture gain on manufactured homes and theme park structures in the 10-year class as section 1245 property. Turbo tax Section 1245 property generally includes all personal property. Turbo tax See Section 1245 property in chapter 4 of Publication 544 for more information. Turbo tax You treat dispositions of section 1250 real property on which you have a gain as section 1245 recovery property. Turbo tax You recognize gain on this property as ordinary income to the extent of prior depreciation deductions taken. Turbo tax Section 1250 property includes most real property. Turbo tax See Section 1250 property in chapter 4 of Publication 544 for more information. Turbo tax This rule applies to all section 1250 real property except the following property: Any 15-, 18-, or 19-year real property that is residential rental property. Turbo tax Any 15-, 18-, or 19-year real property that you elected to depreciate using the alternate ACRS method. Turbo tax Any 15-, 18-, or 19-year real property that is subsidized low-income housing. Turbo tax For these recapture rules, you treat the section 179 deduction and 50% of the investment credit that reduced your basis as depreciation. Turbo tax See Publication 544 for further discussion of dispositions of section 1245 and 1250 property. Turbo tax Prev  Up  Next   Home   More Online Publications
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Understanding Your CP138 Notice

This notice tells you that all or part of the overpayment on a return you filed was applied to other federal taxes you owe.


What you need to do

  • Read your notice carefully. It will explain why we couldn't apply the amount you requested to next year's taxes. It also will suggest additional steps for you to take, depending on your situation.
  • If you requested the overpayment in question to be applied to another tax period, you will need to make an additional payment for that tax period.

You may want to

  • Download a copy of Publication 1, Your Rights as a Taxpayer (if it was not included with your notice).
  • Retain the notice for your records.
  • Review your records for the overpaid tax period and the tax period(s) to which it was applied.

Answers to Common Questions

Q. How can I find out what caused my overpayment to be reapplied?

A. Please contact us at the number listed on your notice for specific information concerning your tax return.

Q. What should I do if I disagree with the changes you made?

A. If you disagree, contact us at the toll-free number listed on the top right corner of your notice.

 

Page Last Reviewed or Updated: 10-Feb-2014

Printable samples of this notice (PDF)

 

 

How to get help

  • Call the 1-800 number listed on the top right corner of your notice.
  • Authorize someone (e.g., accountant) to contact the IRS on your behalf using Form 2848.
  • See if you qualify for help from a Low Income Taxpayer Clinic.
     

The Turbo Tax

Turbo tax Internal Revenue Bulletin:  2012-14  April 2, 2012  Rev. Turbo tax Proc. Turbo tax 2012-23 Table of Contents SECTION 1. Turbo tax PURPOSE SECTION 2. Turbo tax BACKGROUND SECTION 3. Turbo tax SCOPE SECTION 4. Turbo tax APPLICATION. Turbo tax 01 Limitations on Depreciation Deductions for Certain Automobiles. Turbo tax . Turbo tax 02 Inclusions in Income of Lessees of Passenger Automobiles. Turbo tax SECTION 5. Turbo tax EFFECTIVE DATE SECTION 6. Turbo tax DRAFTING INFORMATION SECTION 1. Turbo tax PURPOSE This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2012, including separate tables of limitations on depreciation deductions for trucks and vans; and (2) the amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2012, including a separate table of inclusion amounts for lessees of trucks and vans. Turbo tax The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7) of the Internal Revenue Code. Turbo tax SECTION 2. Turbo tax BACKGROUND . Turbo tax 01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year the taxpayer places the passenger automobile in service and for each succeeding year. Turbo tax For passenger automobiles placed in service after 1988, § 280F(d)(7) requires the Internal Revenue Service to increase the amounts allowable as depreciation deductions by a price inflation adjustment amount. Turbo tax The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. Turbo tax This change reflects the higher rate of price inflation for trucks and vans since 1988. Turbo tax . Turbo tax 02 Section 401(a) of the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010, Pub. Turbo tax L. Turbo tax No. Turbo tax 111-312, 124 Stat. Turbo tax 3296 (Dec. Turbo tax 17, 2010) (the “Act”) extended the 50 percent additional first year depreciation deduction under § 168(k) to qualified property acquired by the taxpayer after December 31, 2007, and before January 1, 2013, if no written binding contract for the acquisition of the property existed before January 1, 2008, and if the taxpayer places the property in service generally before January 1, 2013. Turbo tax Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A)(i) by $8,000 for passenger automobiles to which the additional first year depreciation deduction under § 168(k) (hereinafter, referred to as “§ 168(k) additional first year depreciation deduction”) applies. Turbo tax . Turbo tax 03 Section 168(k)(2)(D)(i) provides that the § 168(k) additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). Turbo tax Section 168(k)(2)(D)(iii) permits a taxpayer to elect out of the § 168(k) additional first year depreciation deduction for any class of property. Turbo tax Section 168(k)(4), as amended by the Act, permits a corporation to elect to increase the alternative minimum tax (“AMT”) credit limitation under § 53(c), instead of claiming the § 168(k) additional first year depreciation deduction for all eligible qualified property placed in service after December 31, 2010, that is round 2 extension property (as defined in § 168(k)(4)(I)(iv)). Turbo tax Accordingly, this revenue procedure provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction applies. Turbo tax This revenue procedure also provides tables for passenger automobiles for which the § 168(k) additional first year depreciation deduction does not apply, either because taxpayer (1) purchased the passenger automobile used; (2) did not use the passenger automobile during 2012 more than 50 percent for business purposes; (3) elected out of the § 168(k) additional first year depreciation deduction pursuant to § 168(k)(2)(D)(iii); or (4) elected to increase the § 53 AMT credit limitation in lieu of claiming § 168(k) additional first year depreciation. Turbo tax . Turbo tax 04 Section 280F(c) requires a reduction in the deduction allowed to the lessee of a leased passenger automobile. Turbo tax The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. Turbo tax Under § 1. Turbo tax 280F-7(a) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an amount determined by applying a formula to the amount obtained from a table. Turbo tax One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. Turbo tax Each table shows inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased. Turbo tax SECTION 3. Turbo tax SCOPE . Turbo tax 01 The limitations on depreciation deductions in section 4. Turbo tax 01(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2012, and continue to apply for each taxable year that the passenger automobile remains in service. Turbo tax . Turbo tax 02 The tables in section 4. Turbo tax 02 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2012. Turbo tax Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable year during which the passenger automobile is leased. Turbo tax See Rev. Turbo tax Proc. Turbo tax 2007-30, 2007-1 C. Turbo tax B. Turbo tax 1104, for passenger automobiles first leased during calendar year 2007; Rev. Turbo tax Proc. Turbo tax 2008-22, 2008-1 C. Turbo tax B. Turbo tax 658, for passenger automobiles first leased during calendar year 2008; Rev. Turbo tax Proc. Turbo tax 2009-24, 2009-17 I. Turbo tax R. Turbo tax B. Turbo tax 885, for passenger automobiles first leased during calendar year 2009; Rev. Turbo tax Proc. Turbo tax 2010-18, 2010-9 I. Turbo tax R. Turbo tax B. Turbo tax 427, as amplified and modified by section 4. Turbo tax 03 of Rev. Turbo tax Proc. Turbo tax 2011-21, 2011-12 I. Turbo tax R. Turbo tax B. Turbo tax 560, for passenger automobiles first leased during calendar year 2010; and Rev. Turbo tax Proc. Turbo tax 2011-21, for passenger automobiles first leased during calendar year 2011. Turbo tax SECTION 4. Turbo tax APPLICATION . Turbo tax 01 Limitations on Depreciation Deductions for Certain Automobiles. Turbo tax (1) Amount of the inflation adjustment. Turbo tax (a) Passenger automobiles (other than trucks or vans). Turbo tax Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. Turbo tax Section 280F(d)(7)(B)(ii) defines the term “CPI automobile component” as the automobile component of the Consumer Price Index for all Urban Consumers published by the Department of Labor. Turbo tax The new car component of the CPI was 115. Turbo tax 2 for October 1987 and 143. Turbo tax 419 for October 2011. Turbo tax The October 2011 index exceeded the October 1987 index by 28. Turbo tax 219. Turbo tax Therefore, the automobile price inflation adjustment for 2012 for passenger automobiles (other than trucks and vans) is 24. Turbo tax 5 percent (28. Turbo tax 219/115. Turbo tax 2 x 100%). Turbo tax The dollar limitations in § 280F(a) are multiplied by a factor of 0. Turbo tax 245, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks and vans) for calendar year 2012. Turbo tax This adjustment applies to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2012. Turbo tax (b) Trucks and vans. Turbo tax To determine the dollar limitations for trucks and vans first placed in service during calendar year 2012, the Service uses the new truck component of the CPI instead of the new car component. Turbo tax The new truck component of the CPI was 112. Turbo tax 4 for October 1987 and 146. Turbo tax 607 for October 2011. Turbo tax The October 2011 index exceeded the October 1987 index by 34. Turbo tax 207. Turbo tax Therefore, the automobile price inflation adjustment for 2012 for trucks and vans is 30. Turbo tax 43 percent (34. Turbo tax 207/112. Turbo tax 4 x 100%). Turbo tax The dollar limitations in § 280F(a) are multiplied by a factor of 0. Turbo tax 3043, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations for trucks and vans. Turbo tax This adjustment applies to all trucks and vans that are first placed in service in calendar year 2012. Turbo tax (2) Amount of the limitation. Turbo tax Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service in calendar year 2012. Turbo tax Use Table 1 for a passenger automobile (other than a truck or van), and Table 2 for a truck or van, placed in service in calendar year 2012 for which the § 168(k) additional first year depreciation deduction applies. Turbo tax Use Table 3 for a passenger automobile (other than a truck or van), and Table 4 for a truck or van, placed in service in calendar year 2012 for which the § 168(k) additional first year depreciation deduction does not apply. Turbo tax REV. Turbo tax PROC. Turbo tax 2012-23 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. Turbo tax PROC. Turbo tax 2012-23 TABLE 2 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $11,360 2nd Tax Year $5,300 3rd Tax Year $3,150 Each Succeeding Year $1,875 REV. Turbo tax PROC. Turbo tax 2012-23 TABLE 3 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,160 2nd Tax Year $5,100 3rd Tax Year $3,050 Each Succeeding Year $1,875 REV. Turbo tax PROC. Turbo tax 2012-23 TABLE 4 DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE IN CALENDAR YEAR 2012 FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY Tax Year Amount 1st Tax Year $3,360 2nd Tax Year $5,300 3rd Tax Year $3,150 Each Succeeding Year $1,875 . Turbo tax 02 Inclusions in Income of Lessees of Passenger Automobiles. Turbo tax A taxpayer must follow the procedures in § 1. Turbo tax 280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2012. Turbo tax In applying these procedures, lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure, while lessees of trucks and vans should use Table 6 of this revenue procedure. Turbo tax REV. Turbo tax PROC. Turbo tax 2012-23 TABLE 5 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2012 Fair Market Value of Passenger Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $18,500 $19,000 2 4 5 6 8 19,000 19,500 2 4 7 7 9 19,500 20,000 2 5 8 8 10 20,000 20,500 3 5 9 10 11 20,500 21,000 3 6 9 12 12 21,000 21,500 3 7 10 12 14 21,500 22,000 3 8 11 13 16 22,000 23,000 4 8 13 15 17 23,000 24,000 4 10 15 17 20 24,000 25,000 5 11 17 19 23 25,000 26,000 6 12 19 21 26 26,000 27,000 6 14 20 24 28 27,000 28,000 7 15 22 26 31 28,000 29,000 7 16 25 28 33 29,000 30,000 8 18 25 32 35 30,000 31,000 9 19 27 34 38 31,000 32,000 9 20 30 36 41 32,000 33,000 10 21 32 38 43 33,000 34,000 10 23 33 41 46 34,000 35,000 11 24 35 43 49 35,000 36,000 12 25 37 45 52 36,000 37,000 12 27 39 47 54 37,000 38,000 13 28 41 49 57 38,000 39,000 13 29 43 52 59 39,000 40,000 14 30 45 54 62 40,000 41,000 14 32 47 56 65 41,000 42,000 15 33 49 58 68 42,000 43,000 16 34 51 61 70 43,000 44,000 16 36 52 63 73 44,000 45,000 17 37 54 66 75 45,000 46,000 17 38 57 67 78 46,000 47,000 18 39 59 70 80 47,000 48,000 19 40 61 72 83 48,000 49,000 19 42 62 75 86 49,000 50,000 20 43 64 77 89 50,000 51,000 20 45 66 79 91 51,000 52,000 21 46 68 81 94 52,000 53,000 21 47 70 84 96 53,000 54,000 22 48 72 86 99 54,000 55,000 23 49 74 88 102 55,000 56,000 23 51 76 90 104 56,000 57,000 24 52 78 92 107 57,000 58,000 24 54 79 95 110 58,000 59,000 25 55 81 97 113 59,000 60,000 26 56 83 100 115 60,000 62,000 26 58 86 103 119 62,000 64,000 28 60 90 108 124 64,000 66,000 29 63 94 112 129 66,000 68,000 30 66 97 117 135 68,000 70,000 31 68 102 121 140 70,000 72,000 32 71 105 126 145 72,000 74,000 33 74 109 130 151 74,000 76,000 35 76 113 135 156 76,000 78,000 36 78 117 140 161 78,000 80,000 37 81 120 145 166 80,000 85,000 39 86 127 152 176 85,000 90,000 42 92 137 163 189 90,000 95,000 45 98 147 175 202 95,000 100,000 48 105 155 187 215 100,000 110,000 52 115 170 203 235 110,000 120,000 58 127 189 227 262 120,000 130,000 64 140 208 250 288 130,000 140,000 70 153 227 272 315 140,000 150,000 75 166 246 296 340 150,000 160,000 81 179 265 318 368 160,000 170,000 87 192 284 341 394 170,000 180,000 93 204 304 364 420 180,000 190,000 99 217 323 387 446 190,000 200,000 105 230 342 409 473 200,000 210,000 111 243 361 432 499 210,000 220,000 116 256 380 455 526 220,000 230,000 122 269 399 478 552 230,000 240,000 128 282 418 501 578 240,000 and up 134 294 437 524 605 REV. Turbo tax PROC. Turbo tax 2012-23 TABLE 6 DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2012 Fair Market Value of Truck or Van Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & Later $19,000 $19,500 1 4 5 6 7 19,500 20,000 2 4 6 7 9 20,000 20,500 2 5 7 8 10 20,500 21,000 2 5 8 10 11 21,000 21,500 3 6 9 10 13 21,500 22,000 3 6 10 12 14 22,000 23,000 3 8 11 14 15 23,000 24,000 4 9 13 16 18 24,000 25,000 4 10 15 19 21 25,000 26,000 5 11 17 21 24 26,000 27,000 6 12 19 23 26 27,000 28,000 6 14 21 25 29 28,000 29,000 7 15 23 27 32 29,000 30,000 7 17 24 30 34 30,000 31,000 8 18 26 32 37 31,000 32,000 9 19 28 34 40 32,000 33,000 9 20 31 36 42 33,000 34,000 10 21 33 39 44 34,000 35,000 10 23 34 41 48 35,000 36,000 11 24 36 44 50 36,000 37,000 12 25 38 46 53 37,000 38,000 12 27 40 48 55 38,000 39,000 13 28 42 50 58 39,000 40,000 13 29 44 53 60 40,000 41,000 14 31 45 55 63 41,000 42,000 14 32 48 57 66 42,000 43,000 15 33 50 59 69 43,000 44,000 16 34 52 61 72 44,000 45,000 16 36 53 64 74 45,000 46,000 17 37 55 66 77 46,000 47,000 17 38 58 68 79 47,000 48,000 18 40 59 70 82 48,000 49,000 19 41 61 73 84 49,000 50,000 19 42 63 75 87 50,000 51,000 20 43 65 78 89 51,000 52,000 20 45 66 80 93 52,000 53,000 21 46 68 83 95 53,000 54,000 21 48 70 84 98 54,000 55,000 22 49 72 87 100 55,000 56,000 23 50 74 89 103 56,000 57,000 23 51 76 92 105 57,000 58,000 24 52 78 94 108 58,000 59,000 24 54 80 96 111 59,000 60,000 25 55 82 98 114 60,000 62,000 26 57 85 101 118 62,000 64,000 27 60 88 106 123 64,000 66,000 28 62 93 110 128 66,000 68,000 29 65 96 115 134 68,000 70,000 30 67 100 120 139 70,000 72,000 32 70 103 125 144 72,000 74,000 33 72 108 129 149 74,000 76,000 34 75 111 134 155 76,000 78,000 35 78 115 138 160 78,000 80,000 36 80 119 143 165 80,000 85,000 38 85 125 151 175 85,000 90,000 41 91 135 163 187 90,000 95,000 44 98 144 174 201 95,000 100,000 47 104 154 185 214 100,000 110,000 52 113 169 202 234 110,000 120,000 57 127 187 225 261 120,000 130,000 63 139 207 248 287 130,000 140,000 69 152 226 271 313 140,000 150,000 75 165 245 294 339 150,000 160,000 81 178 264 316 366 160,000 170,000 87 190 283 340 392 170,000 180,000 92 204 302 362 419 180,000 190,000 98 216 322 385 445 190,000 200,000 104 229 340 409 471 200,000 210,000 110 242 359 431 498 210,000 220,000 116 255 378 454 524 220,000 230,000 122 267 398 477 551 230,000 240,000 127 281 416 500 577 240,000 and up 133 294 435 523 603 SECTION 5. Turbo tax EFFECTIVE DATE This revenue procedure applies to passenger automobiles that a taxpayer first places in service or first leases during calendar year 2012. Turbo tax SECTION 6. Turbo tax DRAFTING INFORMATION The principal author of this revenue procedure is Bernard P. Turbo tax Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). Turbo tax For further information regarding this revenue procedure, contact Mr. Turbo tax Harvey at (202) 622-4930 (not a toll-free call). Turbo tax Prev  Up  Next   Home   More Internal Revenue Bulletins