The IRS has issued the annual tables providing the depreciation deductions available to owners of passenger automobiles, trucks and vans first placed in service during calendar year 2014.
For passenger automobiles, the deduction limitations for the first three tax years are $3,160; $5,100; and $3,050, respectively. And the deduction limitation for each succeeding year is $1,875.
For trucks and vans first placed in service in 2014, the depreciation limitations for the first three years are $3,460; $5,500; and $3,350, respectively. For each succeeding year, the limitation is $1,975.
For leased passenger automobiles and trucks and vans, a reduction in the deduction allowed to the lessee is required. This reduction requires the lessee to include in gross income an amount determined by applying a formula.
The inclusion amount varies with the fair market value of the vehicle. The IRS provides tables showing the applicable inclusion amounts.
In past years, bonus depreciation made the first-year limitation much higher. However, bonus depreciation for passenger automobiles, trucks and vans expired Dec. 31, 2013. The limits spelled out in Revenue Procedure 2014-21 will apply for 2014 – unless Congress acts to retroactively reinstate bonus depreciation to Jan. 1, 2014.