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Hi and welcome to Just Answer!Yes - your assumption is correct - there is a limit on depreciation deduction for cars - see IRS publication 463, page 22 - www.irs.gov/pub/irs-pdf/p463.pdf - that limit includes section 179 deduction - $11,060 limit applies to 2010-2011. The limit is adjusted for 2012 to $11,160. You will see that amount in updated publication 463 when it will be released for 2012.However that limit is applied if the car is used 100% for business. If for instance the car is used 75% for business and 25% for personal purposes - the limit will be reduced accordingly.You may purchase a new or used car - that is not an issue - but the car should be put in service in 2012. In additional - to qualify for section 179 deduction - the car should be used more than 50% for business.
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