If you used a Date Placed in Service line for Oct. 1--Dec. 31, you can deduct a percentage of the regular depreciation amount that is based on the month you disposed of the car. Figure your depreciation deduction for the full year using the rules explained in this chapter and multiply the result by the percentage from the following table for the month that you disposed of the car.

Do not use this table if you are a fiscal year filer. See Dispositions in chapter 3 of Publication 946.

Leasing a Car

If you lease a car that you use in your business, you can use the standard mileage rate or actual expenses to figure your deductible car expense. This section explains how to figure actual expenses for a leased car.

Deductible payments. You can deduct the part of each lease payment that is for the use of the car in your business. You cannot deduct any part of a lease payment that is for personal use of the car, such as commuting.

You must spread any advance payments over the entire lease period. You cannot deduct any payments you make to buy a car, even if the payments are called lease payments.

If you lease a car for 30 days or more, you may have to reduce your lease payment deduction by an "inclusion amount."

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