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IRS Issues 2017 Depreciation Limits for Autos, Light Trucks, and Vans

March 30, 2017

Passenger automobiles, light trucks, and vans are subject to the luxury automotive rules that limit the amount of depreciation and lease expense taxpayers can deduct. Revenue Procedure 2017-29 provides inflation-adjusted allowable depreciation and lease expense amounts for 2017 under the luxury automotive rules.

These inflation-adjusted amounts are issued annually and serve to limit depreciation deductions on passenger automobiles and light trucks (those with less than 6,000 pounds of gross loaded vehicle weight). Following are four tables that illustrate the maximum allowable depreciation deduction per year for each type of vehicle.

Maximum depreciation deductions available in 2017 for:

  • Passenger automobiles that are eligible for bonus deprecation and that are purchased for more than $18,600:
    Tax Year Maximum Depreciation Deduction
    1st tax year $11,160
    2nd tax year $5,100
    3rd tax year $3,050
    Each succeeding year $1,875
  • Passenger automobiles that are ineligible for bonus deprecation and that are purchased for more than $15,800:
    Tax Year Maximum Depreciation Deduction
    1st tax year $3,160
    2nd tax year $5,100
    3rd tax year $3,050
    Each succeeding year $1,875
  • Light trucks and vans that are eligible for bonus deprecation and that are purchased for more than $19,267:
    Tax Year Maximum Depreciation Deduction
    1st tax year $11,560
    2nd tax year $5,700
    3rd tax year $3,450
    Each succeeding year $2,075
  • Light trucks and vans that are ineligible for bonus deprecation and that are purchased for more than $17,800:
    Tax Year Maximum Depreciation Deduction
    1st tax year $3,560
    2nd tax year $5,700
    3rd tax year $3,450
    Each succeeding year $2,075

The revenue procedure also includes inflation-adjusted tables for 2017 that limit the deductible portion of any payments for leased automobiles under the luxury automotive rules. 

Authors
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Edward D. Meyette
Partner