Rev. Proc. 2013-21 - Luxury automobile depreciation limitations for 2013 

• The annual depreciation limitations for passenger automobiles first placed in service in calendar year 2013
• The annual depreciation limits for trucks and vans first placed in service in 2013
• The lease inclusion amounts for automobiles first leased in 2013 (as well as amounts for trucks and vans first leased in 2013)

These amounts are provided in table format in Rev. Proc. 2013-21 [PDF 31 KB] and are also provided below.

Background

Section 280F(a) sets a specific annual dollar limitation (adjusted each year for inflation) on the amount of depreciation allowed for any "passenger automobile"—generally referred to as the "luxury automobile" limitations. The limitations apply to four-wheeled vehicles that are manufactured primarily for use on public streets, roads, and highways, and that are rated at 6,000 pounds gross vehicle weight (GVW) or less (except for trucks and vans, a vehicle's "unloaded" GVW rating is used).

Any depreciation disallowed because of these annual limitations is allowed in years past the end of the usual depreciation schedule, though still subject to the annual limitations.

Beginning with vehicles placed in service in 2003, there are higher annual "luxury automobile" depreciation limitations for vans and trucks than for other passenger automobiles. For this purpose, “vans and trucks” are passenger automobiles that are built on a truck chassis, including minivans and sport utility vehicles that are built on a truck chassis.

Note that there is a complete exclusion from the annual depreciation limitations for “qualified nonpersonal use vehicles” placed in service on or after July 7, 2003; these are described in regulations as vans and light trucks whose design makes them “not likely to be used more than a de minimis amount for personal purposes.”

The IRS issues annual revenue procedures providing the yearly depreciation limits for automobiles, trucks, and vans. The guidance for 2012 was provided in March 2012 as Rev. Proc. 2012-33. See TaxNewsFlash 2012-121

The American Taxpayer Relief Act of 2012 (enacted January 2, 2013) extended the 50% “bonus” depreciation provisions to apply to qualified property acquired and placed in service before January 1, 2014.

Rev. Proc. 2013-21

For 2013, the depreciation limitations for passenger automobiles (other than trucks or vans) placed in service during 2013 for which the additional (bonus) first year depreciation deduction applies are as follows:

The general—i.e., no additional first year bonus depreciation—inflation-adjusted limitations for passenger automobiles (other than trucks and vans) placed in service during 2013 are as follows:

Separate tables are provided for trucks and vans (see below).

For an automobile being depreciated under the modified accelerated cost recovery system (MACRS)—subject to a five- year recovery period and a half-year convention—the $3,160 cap serves to limit the first-year depreciation otherwise allowed for an automobile with a basis of more than $15,800.

Trucks and vans

The depreciation limitations for trucks or vans placed in service during 2013 for which the additional (bonus) first year depreciation deduction applies are as follows:

For trucks and vans placed in service during 2013, the general inflation-adjusted limitations are as follows: