RV Depreciation: Can I Depreciate My Sprinter Van?
What is depreciation?
Depreciation is a means of writing off the value of a business asset over time. It’s realized as an income tax deduction and allows you to recover the cost of your business asset over the course of its useful life. For each tax tear, businesses report a portion of the cost of their vehicles, equipment, computers, buildings, etc. and by doing so they spread the cost of these business items across their useful lives. See more on what property can be depreciated.
Can Sprinter Vans be Depreciated?
The first, and most important criteria, is to determine if the van is used in the course of doing your business. In other words, you only want to claim depreciation for assets used by your business. If you Sprinter van or RV is needed to run your business, and is purchased by your business then you can depreciate it.
For example, if your van is used to conduct your plumbing business, it should qualify to be depreciated over the course of its useful life.
How to Calculate Depreciation
There are several methods for calculating depreciation – straight line depreciation, double declining depreciation, and several others. We chose to use the straight line method – read more on the subject of calculating straight line depreciation.
Straight Line Depreciation Inputs and Formula
Here’s what we needed to input into our formula to calculate our annual straight line depreciation deduction for our work van:
Purchase Price: $36,000
Useful Life: 5 years (per the IRS Useful Life Table)
Salvage Value: $10,000
= (Purchase Price – Salvage Value) / Useful Life (in years)
= (36,000-10,000) / 5
For this instance, we can deduct $5,200 of depreciation per year for 5 years.
Note: We should be clear that we are not tax accountants, and we are speaking to our personal experience of how this manifests within the United States, and for our particular use case. In each case you may wish to consult with a tax accountant to be sure your situation meets the criteria, and to verify your calculations before submitting your annual tax return.