Annual Straight-Line Depreciation = ( Cost of Vehicle – Trade-in Value ) / Number of Years in Useful Life

You can plug in the relevant values to calculate the annual linear depreciation for a vehicle. Here’s a breakdown of the variables:

– Cost of the Vehicle: The initial cost of purchasing the vehicle.
– Trade-in Value: The value of any trade-in, if applicable.
– Number of Years in Useful Life: The expected useful life of the vehicle, typically provided by the IRS or determined based on industry standards.

Example:
Suppose you bought a vehicle for $30,000 with a useful life of 5 years and no trade-in value:

( $30,000 – $0 ) / 5 = $6,000

This means the annual depreciation for the vehicle would be $6,000.