Accurately calculating your vehicle's depreciation costs can be important whether you are trying to obtain a good idea of how to claim depreciation on a tax return or just trying to figure out what a good sale price might be. Vehicle depreciation may be calculated using accelerated depreciation factors. This fact makes it challenging to figure out the rate of depreciation of your vehicle. You can determine the amount of depreciation of your vehicle by collecting some information about it and taking advantage of resources available on the internet.
- Skill level:
Collect the data you will need to determine the depreciation of your vehicle. This includes the age of the car, value at the time of purchase, number of years you have owned the vehicle, the projected lifespan of the vehicle and its salvage value.
Determine the rate at which your vehicle will depreciate. According to published sources such as Kelley Blue Book and Edmunds.com, certain vehicles have high rates of depreciation while others better maintain their value over time. You may wish to use these sources in order to determine if your vehicle is depreciating at a high, medium or low rate of depreciation.
Verify the results of the depreciation calculator by pricing your vehicle for sale or trade-in at an online service such as Kelley Blue Book or Edmunds.com (See "References" for links to both sites). This pricing service should not only provide an idea of the accuracy of the depreciation calculation but also take into account factors such as the condition of the vehicle.
Tips and warnings
- The manner by which vehicle depreciation may be calculated for tax purposes will vary based on factors such as the percentage of time the vehicle is used for business or applicable limitation rules which are set forth by IRS guidelines. These guidelines are available for the 2009 tax year from the Internal Revenue Service website (IRS.gov) and are published as Revenue Procedure 2009-24 (See "References" for a direct link). This procedure provides a number of tables which detail the limits on depreciation that can be claimed.
- 20 of the funniest online reviews ever
- 14 Biggest lies people tell in online dating sites
- Hilarious things Google thinks you're trying to search for