Increased section
179 deduction dollar limit. The
maximum amount you can elect to deduct for most
section 179 property you placed in service in 2005
is $105,000 ($140,000 for qualified enterprise zone,
renewal community, and New York Liberty Zone
(Liberty Zone) property). This limit is reduced by
the amount by which the cost of the property placed
in service during the tax year exceeds $420,000.
Increased section
179 limits for Gulf Opportunity Zone property. If
you placed in service section 179 property that is
qualified Gulf Opportunity Zone (GO Zone) property
acquired after August 27, 2005, the $105,000 section
179 deduction dollar limit and the $420,000
threshold used to figure any reduction in the amount
for which you can make the section 179 election are
increased. See Increased
dollar limits under
Gulf Opportunity Zone (GO
Zone) Property on the IRS website.
Limited
applicability of special depreciation allowance. The
additional special depreciation allowance (including
the increased limits for passenger automobiles) only
applies to certain property placed in service in
2005. You can claim a special allowance for certain
aircraft, certain property with a long production
period, and qualified Liberty Zone property you
placed in service in 2005. You can also claim a
special allowance for qualified GO Zone property you
acquired after August 27, 2005. See
Claiming the Special
Depreciation Allowance on the IRS
website.
Recovery periods
for certain natural gas gathering and transmission
lines and electric transmission property. Certain
natural gas gathering lines placed in service after
April 11, 2005, are treated as 7-year property under
MACRS. In addition, certain electric transmission
property and natural gas distribution lines placed
in service after April 11, 2005, are treated as
15-year property under MACRS. See
Which Property Class
Applies Under GDS and
Which Recovery Period
Applies on the IRS website.
Depreciation
limits on business vehicles. The
total section 179 deduction and depreciation you can
deduct for a passenger auto (that is not an
electric vehicle or a truck or van) you use in your
business and first placed in service in 2005 is
$2,960. The maximum deduction for an electric
vehicle is $8,880. The maximum deduction you can
take for a truck or van you use in your business and
first placed in service in 2005 is $3,260. See
Maximum Depreciation
Deduction on the IRS website.
Photographs of
missing children. The
Internal Revenue Service is a proud partner with the
National Center for Missing and Exploited Children.
Photographs of missing children selected by the
Center may appear in this publication on pages that
would otherwise be blank. You can help bring these
children home by looking at the photographs and
calling 1-800-THE-LOST (1-800-843-5678) if you
recognize a child.
Property
classification for qualified leasehold improvement
and restaurant property. Qualified
leasehold improvement property and qualified
restaurant property placed in service after December
31, 2005, will not be treated as 15-year property
under MACRS. See Which
Property Class Applies Under GDS on the
IRS website.
Recovery periods
for Indian Reservation property. The
shorter recovery periods for qualified property
placed in service on an Indian reservation will not
apply to property placed in service after December
31, 2005. See Indian
Reservation Property under
Which Recovery Period
Applies on the IRS website.
This publication explains how you
can recover the cost of business or income-producing
property through deductions for depreciation (for
example, the special depreciation allowance and
deductions under the Modified Accelerated Cost
Recovery System (MACRS)). It also explains how you
can elect to take a section 179 deduction, instead
of depreciation deductions, for certain property and
the additional rules for listed property.
The depreciation methods
discussed in this publication generally do not apply
to property placed in service before 1987. If you
want information about depreciating such property,
see Publication 534 on the IRS website.
Definitions.
Many of the terms used in this publication are
defined in the
Glossary near the end of the
publication. Glossary terms used in each
discussion under the major headings are listed
before the beginning of each discussion
throughout the publication.
Do you need a
different publication?
The following table shows where you can get
more detailed information when depreciating
certain types of property.
For information
on depreciating: |
See Publication: |
|
A car |
463, Travel,
Entertainment, Gift, and Car
Expenses |
|
Residential rental
property |
527, Residential
Rental Property |
|
Office space in your
home |
587, Business Use of
Your Home (Including Use by Daycare
Providers) |
|
Farm property
|
225, Farmer's Tax
Guide |
Comments and
suggestions.
We welcome your comments about this
publication and your suggestions for future
editions.
You can write to the IRS at the
following address:
Internal Revenue Service
Business Forms and Publications Branch
SE:W:CAR:MP:T:B
1111 Constitution Ave. NW, IR-6406
Washington, DC 20224
They respond to many letters by
telephone. Therefore, it would be helpful if you
would include your daytime phone number,
including the area code, in your correspondence.
You can email the IRS at
*taxforms@irs.gov. (The asterisk must be
included in the address.) Please put “Publications
Comment” on the subject line. Although
they cannot respond individually to each email,
they do appreciate your feedback and will
consider your comments as we revise our tax
products.
Tax
questions. If
you have a tax question, visit
www.irs.gov or call 1-800-829-1040.
Ordering
forms and publications.
Visit
www.irs.gov/formspubs to download forms and
publications, call 1-800-829-3676, or write to
the National Distribution Center at the address
shown under How To
Get Tax Help.
