2013 automobile depreciation limits released

BY SALLY P. SCHREIBER, J.D.

The IRS on Monday issued the 2013 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles under Sec. 280F (Rev. Proc. 2013-21).

For passenger automobiles (other than trucks or vans) placed in service during calendar year 2013 to which 50% first-year bonus depreciation applies, the depreciation limit under Sec. 280F(d)(7) is $11,160 for the first tax year. Trucks and vans to which bonus depreciation applies have a slightly higher limit: $11,360 for the first tax year.

For passenger automobiles (other than trucks or vans) placed in service during calendar year 2013 to which bonus depreciation does not apply, the depreciation limit under Sec. 280F(d)(7) is $3,160 for the first tax year. For trucks and vans to which bonus depreciation does not apply, the limit is $3,360 for the first tax year.

Bonus depreciation does not affect the limits after the first year. For passenger automobiles, the limits are $5,100 for the second tax year; $3,050 for the third tax year; and $1,875 for each successive tax year. For trucks and vans the limits are $5,400 for the second tax year; $3,250 for the third tax year; and $1,975 for each successive tax year.

Sec. 280F(c) limits deductions for the cost of leasing automobiles, expressed as an income inclusion amount according to a formula and tables prescribed under Regs. Sec. 1.280F-7. The revenue procedure provides an updated table of the amounts to be included in income by lessees of passenger automobiles and another for trucks and vans, in both cases with lease terms that begin in calendar year 2013.

Sally P. Schreiber ( sschreiber@aicpa.org ) is a JofA senior editor.

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