IRS Issues 2013 Vehicle Depreciation Deduction Limits

By Frank Byrt

On February 25, the IRS issued Rev. Proc. 2013-21, which reflects inflation adjustments to the depreciation limits and lease rates for cars, trucks, and vans first placed in service in calendar year 2013.
For passenger automobiles placed in service in 2013 that are eligible for the 50 percent first-year bonus depreciation, per the American Taxpayer Relief Act of 2012, the deduction limit under Sec. 280F(d)(7) is:
  • $11,160 for the first tax year
  • $5,100 for the second year
  • $3,050 for the third year
  • $1,875 for each successive year
For automobiles not eligible for bonus depreciation and placed in service during calendar year 2013, the deduction limit for depreciation is:
  • $3,160 for the first tax year
  • $5,100 for the second year
  • $3,050 for the third year 
  • $1,875 for each successive year
For trucks and vans to which the bonus depreciation applies, the deduction limit is:
  • $11,360 for the first tax year
  • $5,400 for the second year
  • $3,250 for the third year
  • $1,975 for each successive year
Trucks and vans not eligible for bonus depreciation have a deduction limit of:
  • $3,360 for the first tax year
  • $5,400 for the second
  • $3,250 for the third year
  • $1,975 in each successive year
As for leased vehicles used in a business, a taxpayer must follow the procedures in Sec. 1.280F-7(a) for determining the inclusion amounts for passenger automobiles first leased in calendar year 2013. Sec. 280F(c) limits deductions for the cost of leasing automobiles, expressed as an income inclusion amount, according to its revised formula and tables.

You may like these other stories...

School tax breaks get House support as Democrats objectRichard Rubin of Bloomberg reported that the House of Representatives on Thursday voted to expand and simplify tax breaks for education as Republicans continue to pass...
Many senior US tax professionals believe that a streamlined audit process will be the top benefit resulting from the IRS Transfer Pricing Audit Roadmap, a new toolkit organized around a notional 24-month audit timeline,...
Tax accounting to be simplified for money-market fundsThe US Securities and Exchange Commission (SEC) voted 3-2 on Wednesday for sweeping changes to institutional money-market funds, Emily Chasan, senior editor of...

Upcoming CPE Webinars

Jul 31
In this session Excel expert David Ringstrom helps beginners get up to speed in Microsoft Excel. However, even experienced Excel users will learn some new tricks, particularly when David discusses under-utilized aspects of Excel.
Aug 5
This webcast will focus on accounting and disclosure policies for various types of consolidations and business combinations.
Aug 20
In this session we'll review best practices for how to generate interest in your firm’s services.
Aug 21
Meet budgets and client expectations using project management skills geared toward the unique challenges faced by CPAs. Kristen Rampe will share how knowing the keys to structuring and executing a successful project can make the difference between success and repeated failures.