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Publication 463

Gift, and Car 


Future Developments(p2)

For the latest information about developments related to Publication 463, such as legislation enacted after it was published, go to

What's New(p2)

Standard mileage rate.(p2)
For 2012, the standard mileage rate for the cost of operating your car for business use is 551/2 cents per mile. Car expenses and use of the standard mileage rate are explained in chapter 4.
Depreciation limits on cars, trucks, and vans.(p2)
For 2012, the first-year limit on the total depreciation deduction for cars increases to $11,160 ($3,160 if you elect not to claim the special depreciation allowance). For trucks and vans the first-year limit has increased to $11,360 ($3,360 if you elect not to claim the special depreciation allowance). Depreciation limits are explained in chapter 4.
Section 179 deduction.(p2)
For 2012, the section 179 deduction limit on qualifying property purchases (including cars, trucks, and vans) is a total of $500,000 and the limit on those purchases at which the deduction begins to be phased out is $2,000,000. Section 179 Deduction is explained in chapter 4.
Special depreciation allowance.(p2)
For 2012, the special (“bonus”) depreciation allowance on qualified property (including cars, trucks, and vans) is reduced to 50%.Special Depreciation Allowance is explained in chapter 4.
Per diem rates.(p2)
Effective for 2012 and later, the IRS no longer updates Publication 1542, Per Diem Rates (For Travel Within the Continental United States). Instead, current per diem rates may be found on the U.S. General Services Administration (GSA) website at


Photographs of missing children.(p2)
The Internal Revenue Service is a proud partner with the National Center for Missing and Exploited Children. Photographs of missing children selected by the Center may appear in this publication on pages that would otherwise be blank. You can help bring these children home by looking at the photographs and calling 1-800-THE-LOST (1-800-843-5678) if you recognize a child.


You may be able to deduct the ordinary and necessary business-related expenses you have for: An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be required to be considered necessary.
This publication explains:

Who should use this publication.(p2)

You should read this publication if you are an employee or a sole proprietor who has business-related travel, entertainment, gift, or transportation expenses.
Users of employer-provided vehicles.(p2)
If an employer-provided vehicle was available for your use, you received a fringe benefit. Generally, your employer must include the value of the use or availability of the vehicle in your income. However, there are exceptions if the use of the vehicle qualifies as a working condition fringe benefit (such as the use of a qualified nonpersonal use vehicle).
A working condition fringe benefit is any property or service provided to you by your employer for which you could deduct the cost as an employee business expense if you had paid for it.
A qualified nonpersonal use vehicle is one that is not likely to be used more than minimally for personal purposes because of its design. See Qualified nonpersonal use vehicles under Actual Car Expenses in chapter 4.
For information on how to report your car expenses that your employer did not provide or reimburse you for (such as when you pay for gas and maintenance for a car your employer provides), see Vehicle Provided by Your Employer in chapter 6.

Who does not need to use this publication.(p2)

Partnerships, corporations, trusts, and employers who reimburse their employees for business expenses should refer to their tax form instructions and chapter 11 of Publication 535, Business Expenses, for information on deducting travel, meals, and entertainment expenses.
If you are an employee, you will not need to read this publication if all of the following are true. If you meet all of these conditions, there is no need to show the expenses or the reimbursements on your return. If you would like more information on reimbursements and accounting to your employer, see chapter 6.
If you meet these conditions and your employer included reimbursements on your Form W-2 in error, ask your employer for a corrected Form W-2.
If you perform services as a volunteer worker for a qualified charity, you may be able to deduct some of your costs as a charitable contribution. See Out-of-Pocket Expenses in Giving Services in Publication 526, Charitable Contributions, for information on the expenses you can deduct.

Comments and suggestions.(p2)

We welcome your comments about this publication and your suggestions for future editions.
You can write to us at the following address:

Internal Revenue Service
Individual Forms and Publications Branch
1111 Constitution Ave. NW, IR-6526
Washington, DC 20224

We respond to many letters by telephone. Therefore, it would be helpful if you would include your daytime phone number, including the area code, in your correspondence.
You can email us at Please put "Publications Comment" on the subject line. You can also send us comments from Select "Comment on Tax Forms and Publications" under "More Information."
Although we cannot respond individually to each comment received, we do appreciate your feedback and will consider your comments as we revise our tax products.
Ordering forms and publications.(p2)
Visit to download forms and publications, call 1-800-TAX-FORM (1-800-829-3676), or write to the address below and receive a response within 10 days after your request is received.

Internal Revenue Service
1201 N. Mitsubishi Motorway
Bloomington, IL 61705-6613

Tax questions.(p2)
If you have a tax question, check the information available on or call 1-800-829-1040. We cannot answer tax questions sent to either of the above addresses.


Useful items

You may want to see:

 225 Farmer's Tax Guide
 529 Miscellaneous Deductions
 535 Business Expenses
 946 How To Depreciate Property
Form (and Instructions)
 Schedule A (Form 1040): Itemized Deductions
 Schedule C (Form 1040): Profit or Loss From Business
 Schedule C-EZ (Form 1040): Net Profit From Business
 Schedule F (Form 1040): Profit or Loss From Farming
 2106: Employee Business Expenses
 2106-EZ: Unreimbursed Employee Business Expenses
 4562: Depreciation and Amortization
See chapter 7, How To Get Tax Help, for information about getting these publications and forms.