IRS Sets 2019 Vehicle Depreciation Limits  

Posted · Add Comment

The Internal Revenue Service has released the depreciation deduction limits for passenger autos (including trucks and vans) first placed in service during 2019. These annually inflation-adjusted numbers represent the maximum income tax depreciation allowed under the luxury automobile rules.

In Revenue Procedure 2019-26, tables set forth the new depreciation limits.

  • Table 1 provides the depreciation limits for automobiles acquired before September 28, 2017, and placed in service during 2019—thus reflecting the section 168(k) additional first year depreciation deduction.
  • Table 2 provides the depreciation limits for automobiles acquired after September 27, 2017, and placed in service during 2019—thus reflecting the additional first year depreciation deduction.
  • Table 3 provide the depreciation limit for automobiles placed in service during 2019 for which no additional first year depreciation deduction applies (that is, when the taxpayer does not use the automobile during 2019 more than 50% for business purposes, or elected out of the additional first year depreciation deduction, or acquired a used automobile that fails to satisfy the statutory rules).
  • Table 4 applies to lessees of passenger automobiles, and shows income inclusion amounts for “a range of fair market values” for each tax year after the automobile is first leased.

For passenger autos acquired before September 28, 2017, and placed in service during 2019, the depreciation limits are $10,100 for the first year ($14,900 with bonus depreciation), $16,100 for the second year, $9,700 for the third year, and $5,760 for each succeeding year.

For passenger autos acquired after September 28, 2017, and placed in service during 2019, the depreciation limits are $10,100 for the first year ($18,100 with bonus depreciation), $16,100 for the second year, $9,700 for the third year, and $5,760 for each succeeding year. The higher limits for passenger autos placed in service after that date is attributable to changes in the tax law afforded by the Tax Cuts and Jobs Act.

Also, the IRS has released the lease inclusion amounts for lessees of passenger autos (including trucks and vans) first leased in 2019.

Please contact Bob Grossman or Don Johnston at 412-338-9300 if you have questions or need additional information.

Related Posts

IRS Issues Proposed Regulations for Bonus Depreciation Amended by Last Year’s Tax Act

IRS Releases Fact Sheet for New Depreciation and Expensing Rules