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.

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