Depreciation in future years. If you use the percentages from the chart, you must continue to use them for the entire recovery period of your car. However, you cannot continue to use the chart if your basis in your car is adjusted because of a casualty. In that case, for the year of adjustment and the remaining recovery period, figure the depreciation without the chart using your adjusted basis in the car at the end of the year of adjustment and over the remaining recovery period. See How To Figure the Deduction Without Using the Tables in chapter 3 of Publication 946.

In future years, do not use the chart from this publication. Instead, use the chart in the publication or the form instructions for those future years.

Disposition of car during recovery period. If you dispose of the car before the end of the recovery period, you are generally allowed a half year of depreciation in the year of disposition unless you purchased the car during the last quarter of a year. See Depreciation deduction for the year of disposition under Disposition of a Car, later, for information on how to figure the depreciation allowed in the year of disposition.

How to use the 1999 chart. To figure your depreciation deduction for 1999, find the percentage in the column of the chart based on the date that you first placed the car in service and the depreciation method that you are using. Multiply the unadjusted basis of your car (defined earlier) by that percentage to determine the amount of your depreciation deduction. If you prefer to figure your depreciation deduction without the help of the chart, see Publication 946.

Your deduction cannot be more than the maximum depreciation limit for cars.

Example. Phil bought a used truck in February 1998 to use exclusively in his landscape business. He paid $6,200 for the truck with no trade-in. Phil did not claim any section 179 deduction and he chose to use the 200% DB method to get the largest depreciation deduction in the early years.

Phil used the MACRS depreciation chart in 1998 to find his percentage. The unadjusted basis of his truck equals its cost because Phil used it exclusively for business. He multiplied the unadjusted basis of his truck, $6,200, by the percentage that applied, 20%, to figure his 1998 depreciation deduction of $1,240.

In 1999, Phil used the truck for personal purposes when he repaired his father's cabin. His records show that the business use of his truck was 90% in 1999. Phil used Table 3 to find his percentage. Reading down the first column for the date placed in service and across to the 200% DB column, he locates his percentage, 32%. He multiplies the unadjusted basis of his truck, $5,580 ($6,200 cost × 90% business use), by 32% to figure his 1999 depreciation deduction of $1,786.

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