Guidance Issued on Vehicle Depreciation Deduction Limitations (Rev. Proc. 2012-23)

The IRS has issued the tables indicating the depreciation deductions for owners of passenger automobiles, trucks and vans first placed in service during calendar year 2012. For passenger automobiles, the deduction limitations for the first three tax years are: $3,160 ($11,160 if bonus depreciation applies), $5,100, and $3,050, respectively, and $1,875 for each succeeding year. For trucks and vans first placed in service in 2012, the depreciation limitations for the first three years are $3,360 ($11,360 if bonus depreciation applies), $5,300, and $3,150, respectively, and $1,875 for each succeeding year.

For leased passenger automobiles and trucks and vans, a reduction in the deduction allowed to the lessee of the passenger automobile is required. This reduction requires a lessee to include in gross income an inclusion amount determined by applying a formula to the amount included in the tables. The inclusion amounts for leased passenger automobiles and vans and trucks vary with the fair market value of the vehicle. Tables are provided with the applicable inclusion amounts.

Rev. Proc. 2012-23, 2012FED ¶46,305

Other References:

Code Sec. 162

CCH Reference – 2012FED ¶1090.11

CCH Reference – 2012FED ¶8590.035

Code Sec. 280F

CCH Reference – 2012FED ¶15,108.023

CCH Reference – 2012FED ¶15,108.048

CCH Reference – 2012FED ¶15,108.049

CCH Reference – 2012FED ¶15,108.40

Tax Research Consultant

CCH Reference – TRC DEPR: 3,504.10

CCH Reference –
TRC DEPR: 3,600

AUTHOR

Wolters Kluwer Tax and Accounting

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