What is the first-year limit on depreciation, special depreciation allowance, and Section 179 deduction for most vehicles placed in service on or before December 31, 2017?

The first-year limit on depreciation, special depreciation allowance, and Section 179 deduction for most vehicles placed in service on or before December 31, 2017, is based on specific IRS guidelines that were in effect for that tax year.

The correct figure indicates that for many vehicles, the maximum depreciation expense that can be claimed in the first year is $11,160, and if a special depreciation allowance is applicable, the limit is $3,160. These numbers reflect the limits established in the tax code for passenger automobiles that satisfy specific requirements and are used for business purposes.

This structure encourages taxpayers to invest in business vehicles while providing clear guidelines on how much tax relief can be achieved in the first year of ownership. Understanding these specific limits is vital for tax planning and to ensure compliance with IRS regulations. The incorrect options suggest different figures that do not align with the IRS guidelines in effect for vehicles placed in service within that timeframe.