» From: Gainesville FL »

Hi Tax Mama -

If you can answer my question you will be my new hero!

I hope I can adequately describe what I am trying to figure out... I am trying to find out how a depreciation was calculated on a corporate return for waaaay back in 1993 & 1994.

It was for several vehicles so therefore a 5 year recovery period, 100% business use and it SAYS the DDB methods was used BUT every program I use to try to duplicate the depreciation deduction arrived at never matches!

In fact 2 of the vehicles which look as though they have a different cost/basis listed - have the same depreciation! I am unable to get in touch with the firm that prepared these returns and this is making me crazy!

I look forward to your reply and newsletter:)

Judy
Ooooh, Poor Judy,

We have that same problem when we try to switch depreciation computations from one software package to another. Although the computation tends to be pretty straightforward, it does get messed up based on the business use percentage and the luxury auto limitations.

You may want to create a spreadsheet and re-figure the depreciation year by year.

1) start with the year placed in service ... there are different Luxury Auto Limits for each year.

In pdf format (downloadable):
   - 1993
   - 1994

2) Next multiply the business use percentage by the allowable deduction for the year. 

3) Repeat for each year until the car is fully depreciated.

4) Make note of any bonus Depreciation taken in the year of purchase. It could not exceed the limit, but it might be in a different column on the tax return's depreciation worksheet.

It will probably take you more than 5 years to fully depreciate any vehicle ... since in years 4 forward, you could only deduct about $1475 ... $1775 (2000) each year. 

This should give you what the amounts should have been. Adjust your figures on the tax return ... and move on with your life. 

Best wishes,
Eva Rosenberg