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How do I figure depreciation on truck

Where do I put beginning balance of truck loan and how do I figure depreciation?

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It is pretty difficult to depreciate a truck in nowadays market, as the trucks prices fluctuate one season to another.

For tax purposes, I would advise depreciating it based on revenue. If you have had a good year, depreciate a big chunk of the value. If you had a bad year financially, depreciate it less.

If you are a sticker for the rules and want to do it by the books, I would advise depreciating it based on mileage. I used to depreciate mine by setting a mile mark that I want to take the truck off my fleet. Then I would divide the number of miles that I want to keep the truck on the road to the average number of miles I approximated the truck will be driven in a one year span. That gave me the number of years I would have the truck on the road, and depreciate it evenly throughout those years.

For example a truck purchased for $60k at 500k miles would be kept in the fleet up to 800k miles. At an yearly average of 100k miles driven a year, I would calculate the depreciation at $20k flat a year, for three years consecutively.

If you buy the truck in the second part of the year, I would advise you to depreciate it over 4 years: $10k first year, $20k second year, $20k third year and $10k the forth year.


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If you talk to an accountant, they will usually tell you that you take 3 years to depreciate a purchase, done over 4 years like Nick said. Divide the purchase cost into 1/3 increments, and you take one of those 1/3 amounts and deduct half of it the first year and the the other half the 4th year. In other words... on $60K truck, 1st year deduction $10K, 2nd $20K, 3rd $20K, and 4th $10K. Now there is another way, in that you take all the deduction the 1st year. It is a 179 deduction. Allowable amount is up to $500,000. In this method, you deduct all of the purchase the 1st year, till it brings you taxes to zero, and whatever it left you deduct the next year. Talk with a CPA, they can fill in the details. I have used both methods. Regarding any loan, you can only deduct interest on the loan. It has nothing to do with your truck depreciation.

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