726 / What special limitations apply to calculating depreciation on automobiles and other property classified as “listed property”?
Editor’s Note: The 2017 Tax Act increased the depreciation limits under Section 280F for passenger automobiles placed into service after December 31, 2017. These rules apply to passenger automobiles for which additional first-year depreciation under IRC Section 168(k) is not claimed. The limits will be indexed for inflation for passenger automobiles that are placed in service after 2018. Computer and peripheral equipment are removed from the definition of listed property.1 These rules are effective for property placed into service after December 31, 2017 and for tax years ending after December 31, 2017. The IRS has also released safe harbor guidance that can be relied on for passenger automobiles placed into service before 2023 (see below).
Limitations
For any passenger automobile placed in service during taxable years after June 18, 1984, the amount of the depreciation deduction, including any amount elected as an expense (see above), cannot exceed the monetary limitations as set forth under the applicable heading in the exhibit, below. Note that once the unadjusted basis of an automobile is recovered, depreciation is no longer deductible. For certain automobiles purchased after December 31, 2007 and before January 1, 2018, the first year depreciation limit was increased by $8,000.2
| Property
Placed in Service
| First Year | Second Year | Third Year | Succeeding
Years
|
| 6-19-84 through 4-2-85 | $4,000 | $6,000 | $6,000 | $6,000 |
| 4-3-85 through 1986 | $3,200 | $4,800 | $4,800 | $4,800 |
| 1987 and 1988 | $2,560 | $4,100 | $2,450 | $1,475 |
| 1989 and 1990 | $2,660 | $4,200 | $2,550 | $1,475 |
| 1991 | $2,660 | $4,300 | $2,550 | $1,575 |
| 1992 | $2,760 | $4,400 | $2,650 | $1,575 |
| 1993 | $2,860 | $4,600 | $2,750 | $1,675 |
| 1994 | $2,960 | $4,700 | $2,850 | $1,675 |
| 1995 and 1996 | $3,060 | $4,900 | $2,950 | $1,775 |
| 1997 | $3,160 | $5,000 | $3,050 | $1,775 |
| 1998 | $3,160 | $5,000 | $2,950 | $1,775 |
| 1999 | $3,060 | $5,000 | $2,950 | $1,775 |
| 2000, 2001, 2002, and 2003 | $3,060 | $4,900 | $2,950 | $1,775 |
| 2004 | $2,960 | $4,800 | $2,850 | $1,675 |
| 2005 | $2,960 | $4,700 | $2,850 | $1,675 |
| 2006 | $2,960 | $4,800 | $2,850 | $1,775 |
| 2007 | $3,060 | $4,900 | $2,850 | $1,775 |
| 2008 and 2009 | $2,960 | $4,800 | $2,850 | $1,775 |
| 2010 | $3,060 | $4,900 | $2,950 | $1,775 |
| 2011 | $3,060 | $4,900 | $2,950 | $1,775 |
| 2012 | $3,160 | $5,100 | $3,050 | $1,875 |
| 2013 | $3,160 | $5,100 | $3,050 | $1,875 |
| 2014 | $3,160 | $5,100 | $3,050 | $1,875 |
| 2015 | $3,160 | $5,100 | $3,050 | $1,875 |
| 2016 | $3,160 | $5,100 | $3,050 | $1,875 |
| 2018 (acquired before Sept. 28, 2017) | $16,400 | $16,000 | $9,600 | $5,760 |
| 2018 (acquired after Sept. 27, 2017) | $18,000 | $16,000 | $9,600 | $5,7601 |
| 2019 (acquired before Sept. 28, 2017) | $14,900 | $16,100 | $9,700 | $5,760 |
| 2019 (acquired after Sept. 27, 2017) | $18,100 | $16,100 | $9,700 | $5,760 |
| 2020 | $18,100 | $16,100 | $9,700 | $5,760 |
| 2021 | $18,200 | $16,400 | $9,800 | $5,860 |
| 2022 | $19,200 | $18,000 | $10,800 | $6,460 |
| 2023 | $20,200 | $19,500 | $11,700 | $6,960 |
| 2024 | $20,400 | $19,800 | $11,900 | $7,160 |
| [Rev. Proc. 2024-13; Rev. Proc. 2023-14; Rev. Proc. 2022-17; Rev. Proc. 2021-31; Rev. Proc. 2020-37; Rev. Proc. 2019-26; Rev. Proc. 2018-25; Rev. Proc. 2017-29; Rev. Proc. 2016-23; Rev. Proc. 2015-19; Rev. Proc. 2014-21; Rev. Proc.2013-21; Rev. Proc. 2012-23; Rev. Proc. 2011-21; Rev. Proc. 2010-18, 2010-9 IRB 427; Rev. Proc. 2009-24, 2009-17 IRB 885; Rev. Proc. 2008-22, 2008-12 IRB 658; Rev. Proc. 2007-30, 2007-18 IRB 1104; Rev. Proc. 2006-18, 2006-12 IRB 645; Rev. Proc. 2005-13, 2005-12 IRB 759; Rev. Proc. 2004-20, 2004-13 IRB 642; Rev. Proc. 2003-75, 2003-2 CB 1018; Rev. Proc. 2002-14, 2002-1 CB 450; Rev. Proc. 2001-19, 2001-1 CB 732; Rev. Proc. 2000-18, 2000-1 CB 722; Rev. Proc. 99-14, 1999-1 CB 413; Rev. Proc. 98-30, 1998-2 CB 930; Rev. Proc. 97-20, 1997-1 CB 647; Rev. Proc. 96-25, 1996-1 CB 681; Rev. Proc. 95-9, 1995-1 CB 498; Rev. Proc. 94-53, 1994-2 CB 712; Rev. Proc. 93-35, 1993-2 CB 472; Rev. Proc. 92-43, 1992-1 CB 873; Rev. Proc. 91-30, 1991-1 CB 563; Rev. Proc. 90-22, 1990-1 CB 504; Rev. Proc. 89-64, 1989-2 CB 783; IRC § 280F(a).] | ||||
The dollar limitations are determined in the year the automobile is placed in service and are subject to an inflation adjustment (rounded to the nearest multiple of $100) for the calendar year in which the automobile is placed in service.3 The dollar amounts in the table above apply in situations where additional first year depreciation applies.
Leased Passenger Automobiles