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...

Mike "the Situation" Sorrentino, one of the stars on the former TV show "Jersey Shore," is in the middle of…well, a tax situation.On October 23, the erstwhile reality show attraction was arraigned...
Deal to lock in US tax cuts is bubbling up on the HillSome US lawmakers are exploring a post-election deal that would lock in permanent tax cuts for major corporations and low-income families, Richard Rubin of Bloomberg...
For many individuals, a key part of their investment and estate planning is to write yearend checks for gifts to family members. The following reminders will help put your tax planning in perspective for 2014 and beyond, and...

Already a member? log in here.

Upcoming CPE Webinars

Oct 30Many Excel users have a love-hate relationship with workbook links.
Nov 5Join CPA thought leader and peer reviewer Rob Cameron and learn ways to improve the outcome of your peer reviews while maximizing the value of your engagement workflow.
Nov 18In this session Excel expert David Ringstrom, CPA tackles what to do when bad things happen to good spreadsheets.
Nov 19How do you minimize redundant work and unnecessary steps to maximize the amount of work moving through your firm?