The IRS has issued the tables indicating the depreciation deductions for 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 $1,875 for each succeeding year. 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, and $1,975 for each succeeding year.
Comment: In prior years, first-year bonus depreciation was available which, when added to the annual first-year limitation, yielded an alternative first-year limitation amount. However, Congress has not extended bonus depreciation to the 2014 tax year in the case of passenger vehicles.
For leased passenger automobiles and trucks and vans, a reduction in the deduction allowed to the lessee of the passenger automobile is required. This reduction requires a lessee to include in gross income an inclusion amount determined by applying a formula to the amount included in the tables. The inclusion amounts for leased passenger automobiles and vans and trucks vary with the fair market value of the vehicle. Tables are provided with the applicable inclusion amounts.
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