The IRS on Friday issued the 2017 inflation adjustments to the car-truck depreciation limitations and lease inclusion amounts for certain automobiles under Sec. 280F. This year’s guidance includes figures for vehicles that are placed in service in 2017 and to which first-year bonus depreciation applies. For passenger automobiles (other than trucks or vans) placed in service during calendar year 2017, the depreciation limit under Sec. 280F(d)(7) is $11,160 for the first tax year, including bonus depreciation, and $3,160 if bonus depreciation does not apply.
For trucks and vans, the Car-Truck Depreciation limit is $11,560 for the first tax year if bonus depreciation applies and $3,560 if it does not apply.
For passenger automobiles, the Car-Truck Depreciation 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 $5,700 for the second tax year, $3,450 for the third tax year, and $2,075 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 Car-Truck Depreciation 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 2017.
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