On Tuesday, the IRS issued the 2014 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles under Sec. 280F (Rev. Proc. 2014-21). Prior-year versions of this annual guidance had included figures for first-year bonus depreciation, but because bonus depreciation is not in effect for 2014, the procedure does not contain those amounts.
For passenger automobiles (other than trucks or vans) placed in service during calendar year 2014, the depreciation limit under Sec. 280F(d)(7) is $3,160 for the first tax year, the same as in 2013.
For trucks and vans, the limit is $3,460 for the first tax year, which is $100 greater than in 2013.
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, all of which were unchanged from 2013.
For trucks and vans the limits are $5,500 for the second tax year; $3,350 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 2014.
— Sally P. Schreiber ( email@example.com ) is a JofA senior editor.