What is the first-year cost recovery deduction Margaret can claim for her pickup truck under MACRS?

The first-year cost recovery deduction for a pickup truck under MACRS (Modified Accelerated Cost Recovery System) is primarily determined by its classification and the cost of the vehicle. Since pickup trucks are considered listed property under the IRS rules, they have specific guidelines for depreciation.

In the first year, if the vehicle qualifies as a Section 179 deduction property and has a cost less than or equal to $26,200 (as of the tax guidelines in 2023), there is a limit to the amount that can be deducted. Additionally, if the business-use percentage of the pickup truck is below 100%, this may also impact the deductible amount.

Given the specifics of this question, the $2,600 first-year deduction aligns with the applicable limits set forth by the IRS for the specific depreciation benefits available for such vehicles. Vehicles that fall under a certain weight category may qualify for maximum write-offs under Section 179, or bonus depreciation may apply as well. However, determining the exact details of the maximum depreciation limit often requires an understanding of the vehicle’s weight, its business-use percentage, and any applicable limitations.

In context, understanding the limits set for vehicles classified as listed property under MACRS is key to determining the correct first-year deduction. The related