Instructions For Form 2106 - Employee Business Expenses

Depreciation Method and Percentage Chart

Date Placed in Service

(a)

(b)

(c)

Oct. 1-Dec. 31, 2001*

200 DB 5%

150 DB 3.75%

SL 2.5%

Jan. 1-Sept. 30, 2001

200 DB 20%

150 DB 15%

SL 10%

Oct. 1-Dec. 31, 2000

200 DB 38%

150 DB 28.88%

SL 20%

Jan. 1-Sept. 30, 2000

200 DB 32%

150 DB 25.5%

SL 20%

Oct. 1-Dec. 31, 1999

200 DB 22.8%

150 DB 20.21%

SL 20%

Jan. 1-Sept. 30, 1999

200 DB 19.2%

150 DB 17.85%

SL 20%

Oct. 1-Dec. 31, 1998

200 DB 13.68%

150 DB 16.4%

SL 20%

Jan. 1-Sept. 30, 1998

200 DB 11.52%

150 DB 16.66%

SL 20%

Oct. 1-Dec. 31, 1997

200 DB 10.94%

150 DB 16.41%

SL 20%

Jan. 1-Sept. 30, 1997

200 DB 11.52%

150 DB 16.66%

SL 20%

Oct. 1-Dec. 31, 1996

200 DB 9.58%

150 DB 14.35%

SL 17.5%**

Jan. 1-Sept. 30, 1996

200 DB 5.76%

150 DB 8.33%

SL 10%

Jan. 1, 1987-Dec. 31, 1995

MACRS**

SL**

June 19, 1984-Dec. 31, 1986

ACRS**

//////////////////////////////////////////////////////////////////

SL**

*You may elect to use the higher percentage rate shown for vehicles placed in service January 1 through September 30, 2001. If you make this election, write “Election

Pursuant to Notice 2001-70” in the top margin of Form 2106.

**Enter your unrecovered basis, if any, on line 34. See Pub. 463 for more information.

Line 32. To figure the basis for depreciation,

business use percentage on line 14 is more

Jan. 1, 1995-Dec. 31, 1998 . . . . . . . . . . . . . .

1,775**

multiply line 30 by the percentage on line 14.

than 50%. This column is also used for

Jan. 1, 1993-Dec. 31, 1994 . . . . . . . . . . . . . .

1,675

From that result, subtract the full amount of any

vehicles placed in service after June 18, 1984

Jan. 1, 1991-Dec. 31, 1992 . . . . . . . . . . . . . .

1,575

section 179 deduction and special depreciation

and before 1987 if you elected the straight line

allowance (and half of any investment credit

method over a recovery period of 12 years.

Jan. 1, 1987-Dec. 31, 1990 . . . . . . . . . . . . . .

1,475

taken before 1986 unless you took the reduced

Note: If your vehicle was used more than 50%

Apr. 3, 1985-Dec. 31, 1986 . . . . . . . . . . . . . .

4,800

credit).

for business in the year it was placed in service

Jan. 1-Apr. 2, 1985 . . . . . . . . . . . . . . . . . . .

6,200

Line 33. If you used the standard mileage rate

and used 50% or less in a later year, part of

June 19-Dec. 31, 1984 . . . . . . . . . . . . . . . .

6,000

in the first year the vehicle was placed in

the depreciation and section 179 deduction

service and now elect to use the actual

previously claimed may have to be added back

* If the vehicle does not qualify for (or you elected not to claim)

expense method, you must use the straight

to your income in the later year. Figure the

the special depreciation allowance, the limit is $3,060.

line method of depreciation for the vehicle’s

amount to be included in income on Form

** For vehicles placed in service after August 5, 1997:

•

estimated useful life. Otherwise, use the above

4797, Sales of Business Property.

These limits do not apply to the cost of any qualified

clean-fuel vehicle property (such as retrofit parts and

chart to find the depreciation method and

If you placed other business property in

components) installed on a vehicle for the purpose of

percentage to enter on line 33. (For example, if

service during the year you placed your

permitting that vehicle to run on a clean-burning fuel. See

you placed a car in service on July 1, 2001,

section 179A for definitions.

vehicle in service (for any year after

CAUTION

•

and you use the method in column (a), enter

The limit for vehicles produced by an original equipment

1986), or you used your vehicle mainly within

manufacturer and designed to run primarily on electricity is,

“200 DB 20%” on line 33.) To use the chart,

an Indian reservation, you may not be able to

for vehicles placed in service in: 2001, $23,080 ($9,280 if the

first find the date you placed the vehicle in

use the chart. See Pub. 946 to figure your

vehicle does not qualify for (or you elected not to claim) the

service (line 11). Then, select the depreciation

depreciation.

special depreciation allowance); 2000, $14,800; 1999,

method and percentage from column (a), (b),

$8,950; and 1998 and 1997, $5,425.

or (c). For vehicles placed in service before

Line 34. If during the year you did not sell or

2001, use the same method you used on last

exchange your vehicle (or you sold or

Paperwork Reduction Act Notice. We ask

year’s return unless a decline in your business

exchanged your vehicle that was placed in

for the information on this form to carry out the

use requires a change to the straight line

service after 1986 and before 1995), multiply

Internal Revenue laws of the United States.

method. For vehicles placed in service during

line 32 by the percentage on line 33. If during

You are required to give us the information. We

2001, select the depreciation method and

the year you sold or exchanged your vehicle

need it to ensure that you are complying with

percentage after reading the explanation for

that was placed in service:

these laws and to allow us to figure and collect

each column.

•

Before 1987, enter -0- on line 34 for that

the right amount of tax.

Column (a). You may use column (a) only

vehicle.

•

if the business use percentage on line 14 is

You are not required to provide the

After 1994, multiply the result for line 34 by

information requested on a form that is subject

more than 50%. The method in this column,

50%, and enter on line 34. However, if you

to the Paperwork Reduction Act unless the

the 200% declining balance method, will give

originally placed the vehicle in service during

form displays a valid OMB control number.

you the largest deduction in the year your

the last 3 months of a year after 1994, multiply

vehicle is placed in service. This column is also

Books or records relating to a form or its

the result for line 34 by the percentage shown

used for vehicles placed in service before 1987

instructions must be retained as long as their

below for the month you disposed of the

and depreciated under the accelerated cost

contents may become material in the

vehicle:

recovery system (ACRS).

administration of any Internal Revenue law.

Month

Percentage

Generally, tax returns and return information

Column (b). You may use column (b) only

Jan., Feb., March . . . . . . . . . . . . . . . . .

12.5%

are confidential, as required by section 6103.

if the business use percentage on line 14 is

more than 50%. The method in this column,

April, May, June . . . . . . . . . . . . . . . . . .

37.5%

The time needed to complete and file this

the 150% declining balance method, will give

form will vary depending on individual

July, Aug., Sept. . . . . . . . . . . . . . . . . . .

62.5%

you a smaller depreciation deduction than in

circumstances. The estimated average time is:

Oct., Nov., Dec. . . . . . . . . . . . . . . . . . .

87.5%

column (a) for the first 3 years. However, you

Recordkeeping, 2 hr., 11 min.; Learning

Line 36. Using the chart below, find the date

will not have a “depreciation adjustment” on

about the law or the form, 27 min.;

you placed your vehicle in service. Then, enter

this item for alternative minimum tax purposes.

Preparing the form, 1 hr., 27 min.; Copying,

on line 36 the corresponding amount from the

This may result in a smaller tax liability if you

assembling, and sending the form to the

Limit column.

must file Form 6251, Alternative Minimum

IRS, 34 min.

Tax — Individuals.

If you have comments concerning the

Date Vehicle Was

Placed in Service

Limit

Column (c). You must use column (c) for

accuracy of these time estimates or

vehicles placed in service after 1986 if the

Sept. 11-Dec. 31, 2001 . . . . . . . . . . . . . . . . $7,660*,**

suggestions for making this form simpler, we

business use percentage on line 14 is 50% or

would be happy to hear from you. See the

Jan. 1-Sept. 10, 2001 . . . . . . . . . . . . . . . . .

3,060**

less. The method for these vehicles is the

Instructions for Form 1040.

Jan. 1-Dec. 31, 2000 . . . . . . . . . . . . . . . . . .

4,900**

straight line method over 5 years. The use of

Jan. 1-Dec. 31, 1999 . . . . . . . . . . . . . . . . . .

2,950**

this column is optional for these vehicles if the

-4-

Instructions For Form 2106 - Employee Business Expenses - 2001 Page 4

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