Close
Close

IRS updates automobile depreciation limits for 2015

RFP
Tax Hot Topics
Tax Hot TopicsThe IRS has issued guidance (Rev. Proc. 2015-19) providing the depreciation limits for passenger automobiles placed in service in 2015 and adjusting the limits for 2014 to account for the retroactive reinstatement of bonus depreciation.

Section 280F limits depreciation deductions for passenger cars, trucks and vans, and these limits are adjusted for inflation every year. Taxpayers who lease automobiles must also reduce their deductions by an amount equivalent to the limit on depreciation deductions.

The original limits for automobiles placed in service in 2014 did not include the 50% first-year deduction allowed by bonus depreciation because Congress did not provide bonus depreciation for 2014 until December.

The increased depreciation limits (including bonus) for cars placed in service in calendar year 2014 are the following:
  • First year: $11,160
  • Second year: $5,100
  • Third year: $3,050
  • Each succeeding year: $1,875

The increased depreciation limits (including bonus) for trucks and vans placed in service in calendar year 2014 are the following:
  • First year: $11,460
  • Second year: $5,500
  • Third year: $3,350
  • Each succeeding year: $1,975

The depreciation limits for cars placed in service in 2015 are the following:
  • First year: $3,160
  • Second year: $5,100
  • Third year: $3,050
  • Each succeeding year: $1,875

The depreciation limits for trucks and vans placed in service in 2015 are the following:
  • First year: $3,460
  • Second year: $5,600
  • Third year: $3,350
  • Each succeeding year: $1,975

The depreciation limits for automobiles placed in service in 2015 could change if bonus depreciation is again extended retroactively for 2015. The revenue procedure also adjusts the tables for determining the limit on deductions for leases of automobiles placed in service in 2014 and 2015 to account for bonus depreciation and inflation adjustment, respectively. The tables are generally based on the fair market value of the automobiles.

Contact
Mel Schwarz
T +1 202 521 1564
E mel.schwarz@us.gt.com

Tax professional standards statement
This document supports Grant Thornton LLP’s marketing of professional services and is not written tax advice directed at the particular facts and circumstances of any person. If you are interested in the subject of this document, we encourage you to contact us or an independent tax adviser to discuss the potential application to your particular situation. Nothing herein shall be construed as imposing a limitation on any person from disclosing the tax treatment or tax structure of any matter addressed herein. To the extent this document may be considered to contain written tax advice, any written advice contained in, forwarded with or attached to this document is not intended by Grant Thornton LLP to be used, and cannot be used, by any person for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code.

The information contained herein is general in nature and is based on authorities that are subject to change. It is not, and should not be construed as, accounting, legal or tax advice provided by Grant Thornton LLP to the reader. This material may not be applicable to, or suitable for, the reader’s specific circumstances or needs and may require consideration of tax and nontax factors not described herein. Contact Grant Thornton LLP or other tax professionals prior to taking any action based upon this information. Changes in tax laws or other factors could affect, on a prospective or retroactive basis, the information contained herein; Grant Thornton LLP assumes no obligation to inform the reader of any such changes. All references to “Section,” “Sec.,” or “§” refer to the Internal Revenue Code of 1986, as amended.