United States

2014 depreciation limits for certain passenger automobiles released


The IRS has released the applicable limitations on depreciation deductions under section 280F for passenger automobiles first placed in service by taxpayers during 2014 (as well as amounts required to be included in income for lessees of passenger automobiles with respect to leases entered into in 2014). Section 280F generally imposes limitations on the amount taxpayers may deduct for passenger automobiles, as defined in that section. Subject to certain exceptions, for purposes of section 280F, passenger automobiles include four-wheeled vehicles manufactured primarily for use on public streets, roads and highways and with an unloaded gross vehicle weight rating (gross vehicle weight rating for trucks and vans) of 6,000 pounds or less. The limits provided in Rev. Proc. 2014-21 reflect the automobile price inflation adjustments required by section 280F.

Under Rev. Proc. 2014-21, the depreciation deduction limits for passenger cars (other than trucks or vans) placed in service in 2014 are as follows:

  • First year: $3,160
  • Second year: $5,100
  • Third year: $3,050
  • Each succeeding year: $1,875

The depreciation deduction limits for trucks or vans placed in service in 2014 are as follows:

  • First year: $3,460
  • Second year: $5,500
  • Third year: $3,350
  • Each succeeding year: $1,975

Taxpayers affected by section 280F may recall that in prior years, the first-year limitation was increased by $8,000 in the case of passenger automotives qualifying for bonus deprecation. Taxpayers should be aware that because bonus depreciation has not been extended to property placed in service after Dec. 31, 2013, this $8,000 increase is not presently available to automobiles placed in service in 2014. Taxpayers with passenger automobiles used in their trade or business and subject to section 280F should take note of the applicable limits to ensure that such vehicles are depreciated appropriately.

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