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IRS Issues Inflation Updates for Automobile Depreciation Deduction Limits

Please note: This item is from our archives and was published in 2009. It is provided for historical reference. The content may be out of date and links may no longer function.

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The IRS issued Revenue Procedure 2009-24 on Thursday that provides 2009 inflation adjustments to the depreciation limitations and lease inclusion amounts for certain automobiles under IRC §§ 280F and 168. For passenger automobiles (other than trucks or vans) placed in service during calendar 2009, the 2009 depreciation limit under IRC § 280F(d)(7) is $2,960 for the first tax year ($10,960 for a car to which 50% bonus depreciation under section 168(k) applies), $4,800 for the second tax year, $2,850 for the third year and $1,775 for each successive year. Higher limits are provided for trucks and vans.

IRC § 280F(c) likewise limits deductions for the cost of leasing automobiles, expressed as an income inclusion amount according to a formula and tables prescribed under Treas. Reg. 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 2009.