Internal Revenue Bulletin:  2004-13 

March 29, 2004 

Rev. Proc. 2004-20


SECTION 1. PURPOSE

01. This revenue procedure provides: (1) limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2004, including special tables of limitations on depreciation deductions for trucks and vans, and for passenger automobiles designed to be propelled primarily by electricity and built by an original equipment manufacturer (electric automobiles); (2) the amounts to be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2004, including a separate table of inclusion amounts for lessees of trucks and vans, and a separate table for lessees of electric automobiles; and (3) the maximum allowable value of employer-provided passenger automobiles first made available to employees for personal use in calendar year 2004 for which the vehicle cents-per-mile valuation rule provided under § 1.61-21(e) of the Income Tax Regulations may be applicable.

02. This revenue procedure also provides tables of dollar limitations on depreciation deductions for owners of passenger automobiles to which the additional 50 percent first-year allowance for depreciation available under § 168(k)(4) applies, including special tables of limitations on depreciation deductions for qualifying trucks and vans and for qualifying electric automobiles. For purposes of these tables, the additional 50 percent first-year allowance does not apply if the taxpayer has elected under § 168(k)(2)(C)(iii) not to take the additional allowance.

03. The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7). The maximum allowable passenger automobile value for applying the vehicle cents-per-mile valuation rule reflects the automobile price inflation adjustment of § 280F(d)(7) of the Internal Revenue Code, as required by § 1.61-21(e)(1)(iii)(A).

SECTION 2. BACKGROUND

01. For owners of passenger automobiles, § 280F(a) imposes dollar limitations on the depreciation deduction for the year that the passenger automobile is placed in service by the taxpayer and each succeeding year. In the case of electric automobiles placed in service after August 5, 1997, and before January 1, 2007, § 280F(a)(1)(C) requires tripling of these limitation amounts. Section 280F(d)(7) requires the amounts allowable as depreciation deductions to be increased by a price inflation adjustment amount for passenger automobiles placed in service after 1988. The method of calculating this price inflation amount for trucks and vans placed in service in or after calendar year 2003 uses a different CPI “automobile component” (the “new trucks” component) than that used in the price inflation amount calculation for other passenger automobiles (the “new cars” component), resulting in somewhat higher depreciation deductions for trucks and vans. This change reflects the higher rate of price inflation that trucks and vans have been subject to since 1988. For purposes of this revenue procedure, the term “trucks and vans” refers to passenger automobiles that are built on a truck chassis, including minivans and sport utility vehicles (SUVs) that are built on a truck chassis.

02. Section 101 of the Job Creation and Worker Assistance Act of 2002, Pub. L. No. 107-147, 116 Stat. 21 (March 9, 2002) added § 168(k) to the Code. Generally, § 168(k)(1)(A) provides an additional 30 percent first-year depreciation deduction for new property acquired by the taxpayer after September 10, 2001, and before September 11, 2004 (subsequently extended to January 1, 2005), so long as no written binding contract for the acquisition of the property existed prior to September 11, 2001.

03. Section 201 of the Jobs and Growth Tax Relief Reconciliation Act of 2003, Pub. L. No. 108-27, 117 Stat. 752 (May 28, 2003) added § 168(k)(4) to the Code. Section 168(k)(4)(A)(i) provides that § 168(k)(1) is applied by substituting “50 percent” for “30 percent” for new property acquired by the taxpayer after May 5, 2003, and before January 1, 2005, so long as no written binding contract for the acquisition of the property existed prior to May 6, 2003. In the case of a passenger automobile to which the 50 percent additional allowance applies (or would apply but for an election under § 168(k)(4)(E)) and for which no election has been made under § 168(k)(2)(C)(iii), § 168(k)(4)(D) increases the first-year depreciation allowed under § 280F(a)(1)(A) by $7,650. For purposes of this revenue procedure, a passenger automobile to which the additional 50 percent first-year allowance under § 168(k)(4) applies (or would apply but for an election under § 168(k)(4)(E)) and for which no election has been made under § 168(k)(2)(C)(iii) is referred to as a “§ 168(k)(4) passenger automobile”.

04. For leased passenger automobiles, § 280F(c) requires a reduction in the deduction allowed to the lessee of the passenger automobile. The reduction must be substantially equivalent to the limitations on the depreciation deductions imposed on owners of passenger automobiles. Under § 1.280F-7(a), this reduction requires the lessees to include in gross income an inclusion amount determined by applying a formula to the amount obtained from a table. There is a table for lessees of electric automobiles, a table for lessees of trucks and vans, and a table for all other passenger automobiles. Each table shows inclusion amounts for a range of fair market values for each tax year after the passenger automobile is first leased. These tables should also be used by lessees of § 168(k)(4) passenger automobiles.

05. For passenger automobiles (including trucks, vans, and electric automobiles) first provided by employers to employees that meet the requirements of § 1.61-21(e)(1), the value to the employee of the use of the passenger automobile may be determined under the vehicle cents-per-mile valuation rule of § 1.61-21(e). Section 1.61-21(e)(1)(iii)(A) provides that for a passenger automobile first made available after 1988 to any employee of the employer for personal use, the value of the use of the passenger automobile may not be determined under the vehicle cents-per-mile valuation rule for a calendar year if the fair market value of the passenger automobile (determined pursuant to § 1.61-21(d)(5)(i) through (iv)) on the first date the passenger automobile is made available to the employee exceeds $12,800 as adjusted by § 280F(d)(7).

SECTION 3. SCOPE

01. The limitations on depreciation deductions in section 4.02(2) of this revenue procedure apply to passenger automobiles (other than leased passenger automobiles) that are placed in service by the taxpayer in calendar year 2004, and continue to apply for each tax year that the passenger automobile remains in service.

02. The tables in section 4.03 of this revenue procedure apply to leased passenger automobiles for which the lease term begins during calendar year 2004. Lessees of such passenger automobiles must use these tables to determine the inclusion amount for each tax year during which the passenger automobile is leased. See Rev. Proc. 2002-14, 2002-1 C.B. 450, for passenger automobiles first leased before January 1, 2003, and Rev. Proc. 2003-75, 2003-2 C.B. 1018, for passenger automobiles first leased during calendar year 2003.

03. The maximum fair market value figure in section 4.04(2) of this revenue procedure applies to employer-provided passenger automobiles first made available to any employee for personal use in calendar year 2004. See Rev. Proc. 2002-14 for the maximum fair market value figure for passenger automobiles first made available before January 1, 2003, and Rev. Proc. 2003-75 for passenger automobiles first made available during calendar year 2003.

SECTION 4. APPLICATION

01. In General.

(1) Limitations on Depreciation Deductions for Certain Automobiles. The limitations on depreciation deductions for passenger automobiles placed in service by the taxpayer for the first time during calendar year 2004 are found in Tables 1 through 9 in section 4.02(2) of this revenue procedure. Table 1 of this revenue procedure provides limitations on depreciation deductions for a passenger automobile (other than a truck, van, electric automobile, or § 168(k)(4) passenger automobile). Table 2 of this revenue procedure provides limitations on depreciation deductions for a § 168(k)(4) passenger automobile (other than a truck, van, or electric automobile). Table 3 of this revenue procedure provides limitations on depreciation deductions for a truck or van (other than a § 168(k)(4) passenger automobile). Table 4 of this revenue procedure provides limitations on depreciation deductions for a truck or van that is a § 168(k)(4) passenger automobile. Table 5 of this revenue procedure provides limitations on depreciation deductions for an electric automobile (other than a § 168(k)(4) passenger automobile). Table 6 of this revenue procedure provides limitations on depreciation deductions for an electric automobile that is a 168(k)(4) passenger automobile.

(2) Inclusions in Income of Lessees of Passenger Automobiles. A taxpayer first leasing a passenger automobile during calendar year 2004 must determine the inclusion amount that is added to gross income using the tables in section 4.03 of this revenue procedure. The inclusion amount is determined using Table 7 in the case of a passenger automobile (other than a truck, van, or electric automobile), Table 8 in the case of a truck or van, and Table 9 in the case of an electric automobile. In addition, the procedures of § 1.280F-7(a) must be followed.

(3) Maximum Automobile Value for Using the Cents-per-mile Valuation Rule. An employer providing a passenger automobile for the first time in calendar year 2004 for the personal use of any employee may determine the value of the use of the passenger automobile by using the cents-per-mile valuation rule in § 1.61-21(e) if the fair market value of the passenger automobile does not exceed the amount specified in section 4.04(2) of this revenue procedure. If the fair market value of the passenger automobile exceeds the amount specified in section 4.04(2) of this revenue procedure, the employer may determine the value of the use of the passenger automobile under the general valuation rules of § 1.61-21(b) or under the special valuation rules of § 1.61-21(d) (Automobile lease valuation) or § 1.61-21(f) (Commuting valuation) if the applicable requirements are met.

02. Limitations on Depreciation Deductions for Certain Automobiles.

(1) Amount of the Inflation Adjustment. Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. The term “CPI automobile component” is defined in § 280F(d)(7)(B)(ii) as the “automobile component” of the Consumer Price Index for all Urban Consumers published by the Department of Labor (the CPI). The new car component of the CPI was 115.2 for October 1987 and 133.5 for October 2003. The October 2003 index exceeded the October 1987 index by 18.3. The Service has, therefore, determined that the automobile price inflation adjustment for 2004 for passenger automobiles (other than trucks and vans) is 15.89 percent (18.3/115.2 x 100%). This adjustment is applicable to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2004. The dollar limitations in § 280F(a) must therefore be multiplied by a factor of 0.1589, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to passenger automobiles (other than trucks, vans, and electric automobiles) for calendar year 2004. To determine the dollar limitations applicable to an electric automobile first placed in service during calendar year 2004, the dollar limitations in § 280F(a) are tripled in accordance with § 280F(a)(1)(C) and are then multiplied by a factor of 0.1588; the resulting increases, after rounding to the nearest $100, are added to the tripled 1988 limitations to give the depreciation limitations for calendar year 2004. To determine the dollar limitations applicable to trucks and vans first placed in service during calendar year 2004, the new truck component of the CPI is used instead of the new car component. The new truck component of the CPI was 112.4 for October 1987 and 144.6 for October 2003. The October 2003 index exceeded the October 1987 index by 32.2. The Service has, therefore, determined that the automobile price inflation adjustment for 2004 for trucks and vans is 28.65 percent (32.2/112.4 x 100%). This adjustment is applicable to all trucks and vans that are first placed in service in calendar year 2004. The dollar limitations in § 280F(a) must therefore be multiplied by a factor of 0.2865, and the resulting increases, after rounding to the nearest $100, are added to the 1988 limitations to give the depreciation limitations applicable to trucks and vans.

(2) Amount of the Limitation. For passenger automobiles placed in service by the taxpayer in calendar year 2004, Tables 1 through 6 contain the dollar amount of the depreciation limitation for each tax year. Use Table 1 for passenger automobiles (other than trucks, vans, electric automobiles, and § 168(k)(4) passenger automobiles) placed in service by the taxpayer in calendar year 2004. Use Table 2 for § 168(k)(4) passenger automobiles (other than trucks, vans, and electric automobiles) placed in service by the taxpayer in calendar year 2004. Use Table 3 for trucks and vans (other than § 168(k)(4) passenger automobiles) placed in service by the taxpayer in calendar year 2004. Use Table 4 for trucks or vans that are § 168(k)(4) passenger automobiles placed in service by the taxpayer in calendar year 2004. Use Table 5 for electric automobiles (other than § 168(k)(4) passenger automobiles) placed in service by the taxpayer in calendar year 2004. Use Table 6 for electric automobiles that are § 168(k)(4) passenger automobiles placed in service by the taxpayer in calendar year 2004.

REV. PROC. 2004-20 TABLE 1
DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT § 168(k)(4) PASSENGER AUTOMOBILES, TRUCKS, VANS, OR ELECTRIC AUTOMOBILES) PLACED IN SERVICE BY THE TAXPAYER DURING CALENDAR YEAR 2004
Tax Year Amount
1st Tax Year $2,960
2nd Tax Year $4,800
3rd Tax Year $2,850
Each Succeeding Year $1,675
REV. PROC. 2004-20 TABLE 2
DEPRECIATION LIMITATIONS FOR § 168(k)(4) PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS, VANS, OR ELECTRIC AUTOMOBILES) PLACED IN SERVICE BY THE TAXPAYER DURING CALENDAR YEAR 2004
Tax Year Amount
1st Tax Year $10,610
2nd Tax Year $4,800
3rd Tax Year $2,850
Each Succeeding Year $1,675
REV. PROC. 2004-20 TABLE 3
DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS (THAT ARE NOT § 168(k)(4) PASSENGER AUTOMOBILES) PLACED IN SERVICE BY THE TAXPAYER DURING CALENDAR YEAR 2004
Tax Year Amount
1st Tax Year $3,260
2nd Tax Year $5,300
3rd Tax Year $3,150
Each Succeeding Year $1,875
REV. PROC. 2004-20 TABLE 4
DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS THAT ARE § 168(k)(4) PASSENGER AUTOMOBILES PLACED IN SERVICE BY THE TAXPAYER DURING CALENDAR YEAR 2004
Tax Year Amount
1st Tax Year $10,910
2nd Tax Year $5,300
3rd Tax Year $3,150
Each Succeeding Year $1,875
REV. PROC. 2004-20 TABLE 5
DEPRECIATION LIMITATIONS FOR ELECTRIC AUTOMOBILES (THAT ARE NOT § 168(k)(4) PASSENGER AUTOMOBILES) PLACED IN SERVICE BY THE TAXPAYER DURING CALENDAR YEAR 2004
Tax Year Amount
1st Tax Year $8,880
2nd Tax Year $14,300
3rd Tax Year $8,550
Each Succeeding Year $5,125
REV. PROC. 2004-20 TABLE 6
DEPRECIATION LIMITATIONS FOR ELECTRIC AUTOMOBILES THAT ARE § 168(k)(4) PASSENGER AUTOMOBILES PLACED IN SERVICE BY THE TAXPAYER DURING CALENDAR YEAR 2004
Tax Year Amount
1st Tax Year $31,830
2nd Tax Year $14,300
3rd Tax Year $8,550
Each Succeeding Year $5,125

03. Inclusions in Income of Lessees of Passenger Automobiles.

The inclusion amounts for passenger automobiles (including § 168(k)(1) passenger automobiles and § 168(k)(4) passenger automobiles) first leased in calendar year 2004 are calculated under the procedures described in § 1.280F-7(a). Lessees of passenger automobiles other than trucks, vans, and electric automobiles should use Table 7 of this revenue procedure in applying these procedures, while lessees of trucks and vans should use Table 8 of this revenue procedure and lessees of electric automobiles should use Table 9 of this revenue procedure.

REV. PROC. 2004-20 TABLE 7
DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS, VANS, OR ELECTRIC AUTOMOBILES) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2004
Fair Market Value of Passenger Automobile Tax Year During Lease
Over Not Over 1st 2nd 3rd 4th 5th & Later
$17,500 18,000 11 23 33 42 48
18,000 18,500 13 26 40 49 56
18,500 19,000 14 31 46 55 65
19,000 19,500 16 35 51 63 73
19,500 20,000 18 39 57 70 81
20,000 20,500 20 43 63 77 89
20,500 21,000 22 47 69 84 97
21,000 21,500 23 51 75 91 106
21,500 22,000 25 55 81 98 114
22,000 23,000 28 61 90 109 126
23,000 24,000 32 69 102 123 142
24,000 25,000 35 77 114 137 159
25,000 26,000 39 85 126 151 176
26,000 27,000 43 93 137 166 192
27,000 28,000 46 101 149 180 209
28,000 29,000 50 109 161 194 225
29,000 30,000 54 116 174 208 242
30,000 31,000 57 125 185 223 257
31,000 32,000 61 133 197 237 274
32,000 33,000 64 141 209 251 291
33,000 34,000 68 149 221 265 307
34,000 35,000 72 157 232 280 323
35,000 36,000 75 165 244 294 340
36,000 37,000 79 173 256 308 357
37,000 38,000 83 181 268 322 373
38,000 39,000 86 189 280 337 389
39,000 40,000 90 197 292 351 405
40,000 41,000 94 204 304 365 423
41,000 42,000 97 213 316 379 438
42,000 43,000 101 221 327 394 455
43,000 44,000 105 228 340 408 471
44,000 45,000 108 237 351 422 488
45,000 46,000 112 245 363 436 504
46,000 47,000 115 253 375 451 520
47,000 48,000 119 261 387 464 538
48,000 49,000 123 269 398 479 554
49,000 50,000 126 277 411 493 570
50,000 51,000 130 285 422 508 586
51,000 52,000 134 292 435 522 603
52,000 53,000 137 301 446 536 619
53,000 54,000 141 309 458 550 636
54,000 55,000 145 316 471 564 652
55,000 56,000 148 325 482 578 669
56,000 57,000 152 333 493 593 685
57,000 58,000 155 341 506 607 701
58,000 59,000 159 349 517 622 718
59,000 60,000 163 357 529 636 734
60,000 62,000 168 369 547 657 759
62,000 64,000 176 384 571 686 792
64,000 66,000 183 401 594 714 825
66,000 68,000 190 417 618 743 857
68,000 70,000 197 433 642 771 890
70,000 72,000 205 448 666 800 923
72,000 74,000 212 465 689 828 956
74,000 76,000 219 481 713 856 990
76,000 78,000 227 496 738 884 1,022
78,000 80,000 234 513 760 914 1,055
80,000 85,000 247 540 803 963 1,112
85,000 90,000 265 580 862 1,035 1,194
90,000 95,000 283 621 921 1,105 1,277
95,000 100,000 301 661 980 1,177 1,359
100,000 110,000 328 721 1,069 1,284 1,482
110,000 120,000 365 800 1,189 1,426 1,646
120,000 130,000 401 881 1,307 1,568 1,811
130,000 140,000 438 960 1,426 1,711 1,975
140,000 150,000 474 1,041 1,544 1,853 2,140
150,000 160,000 511 1,120 1,663 1,996 2,304
160,000 170,000 547 1,200 1,782 2,138 2,468
170,000 180,000 583 1,281 1,900 2,280 2,633
180,000 190,000 620 1,360 2,020 2,422 2,797
190,000 200,000 656 1,440 2,139 2,564 2,962
200,000 210,000 693 1,520 2,257 2,707 3,126
210,000 220,000 729 1,600 2,376 2,849 3,291
220,000 230,000 765 1,681 2,494 2,991 3,455
230,000 240,000 802 1,760 2,613 3,134 3,619
240,000 250,000 838 1,840 2,732 3,276 3,784
REV. PROC. 2004-20 TABLE 8
DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2004
Fair Market Value of Truck or Van Tax Year During Lease
Over Not Over 1st 2nd 3rd 4th 5th and Later
$18,000 $18,500 7 15 21 26 30
18,500 19,000 9 18 28 33 38
19,000 19,500 11 22 34 40 47
19,500 20,000 13 26 39 48 55
20,000 20,500 14 31 45 54 63
20,500 21,000 16 35 51 61 72
21,000 21,500 18 38 58 68 80
21,500 22,000 20 42 63 76 88
22,000 23,000 23 48 72 87 100
23,000 24,000 26 57 83 101 117
24,000 25,000 30 64 96 115 133
25,000 26,000 34 72 108 129 149
26,000 27,000 37 81 119 143 166
27,000 28,000 41 88 132 157 183
28,000 29,000 44 97 143 172 198
29,000 30,000 48 104 155 187 215
30,000 31,000 52 112 167 201 231
31,000 32,000 55 121 178 215 248
32,000 33,000 59 128 191 229 264
33,000 34,000 63 136 203 243 281
34,000 35,000 66 145 214 257 298
35,000 36,000 70 152 227 271 314
36,000 37,000 74 160 238 286 330
37,000 38,000 77 169 249 301 346
38,000 39,000 81 176 262 314 364
39,000 40,000 84 185 273 329 379
40,000 41,000 88 192 286 343 396
41,000 42,000 92 200 298 357 412
42,000 43,000 95 209 309 371 429
43,000 44,000 99 216 322 385 445
44,000 45,000 103 224 333 400 462
45,000 46,000 106 233 345 413 479
46,000 47,000 110 240 357 428 495
47,000 48,000 114 248 369 442 511
48,000 49,000 117 257 380 457 527
49,000 50,000 121 264 393 471 544
50,000 51,000 125 272 404 486 560
51,000 52,000 128 280 417 499 577
52,000 53,000 132 288 428 514 593
53,000 54,000 135 297 440 527 610
54,000 55,000 139 304 452 542 626
55,000 56,000 143 312 464 556 643
56,000 57,000 146 321 475 571 659
57,000 58,000 150 328 488 585 675
58,000 59,000 154 336 499 600 691
59,000 60,000 157 345 511 613 708
60,000 62,000 163 356 529 635 733
62,000 64,000 170 372 553 663 766
64,000 66,000 177 389 576 692 798
66,000 68,000 185 404 600 720 832
68,000 70,000 192 420 624 749 864
70,000 72,000 199 436 648 777 897
72,000 74,000 206 453 671 805 931
74,000 76,000 214 468 695 834 963
76,000 78,000 221 484 719 863 996
78,000 80,000 228 501 742 891 1,029
80,000 85,000 241 528 785 940 1,087
85,000 90,000 259 568 844 1,012 1,168
90,000 95,000 277 609 902 1,084 1,250
95,000 100,000 296 648 962 1,155 1,333
100,000 110,000 323 708 1,052 1,261 1,456
110,000 120,000 359 788 1,171 1,403 1,620
120,000 130,000 396 868 1,289 1,546 1,785
130,000 140,000 432 948 1,408 1,688 1,949
140,000 150,000 469 1,028 1,526 1,831 2,113
150,000 160,000 505 1,108 1,645 1,973 2,278
160,000 170,000 541 1,188 1,764 2,115 2,443
170,000 180,000 578 1,268 1,882 2,258 2,607
180,000 190,000 614 1,348 2,001 2,400 2,771
190,000 200,000 651 1,428 2,120 2,542 2,936
200,000 210,000 687 1,508 2,239 2,684 3,100
210,000 220,000 724 1,588 2,357 2,827 3,264
220,000 230,000 760 1,668 2,476 2,969 3,429
230,000 240,000 796 1,748 2,595 3,112 3,593
240,000 250,000 833 1,828 2,713 3,254 3,758
REV. PROC. 2004-20 TABLE 9
DOLLAR AMOUNTS FOR ELECTRIC AUTOMOBILES WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2004
Fair Market Value of Electric Automobile Tax Year During Lease
Over Not Over 1st 2nd 3rd 4th 5th and Later
$53,000 $54,000 33 72 106 127 147
54,000 55,000 37 79 118 142 164
55,000 56,000 40 88 130 155 180
56,000 57,000 44 96 141 170 197
57,000 58,000 48 103 154 184 213
58,000 59,000 51 112 165 199 229
59,000 60,000 55 120 177 213 245
60,000 62,000 60 132 195 234 270
62,000 64,000 68 147 219 263 303
64,000 66,000 75 164 242 291 336
66,000 68,000 82 180 266 320 369
68,000 70,000 90 195 290 348 402
70,000 72,000 97 211 314 377 435
72,000 74,000 104 228 337 405 468
74,000 76,000 111 244 361 434 500
76,000 78,000 119 259 385 462 534
78,000 80,000 126 275 409 491 566
80,000 85,000 139 303 451 540 624
85,000 90,000 157 343 510 612 706
90,000 95,000 175 384 569 682 788
95,000 100,000 193 424 628 754 870
100,000 110,000 221 483 718 860 994
110,000 120,000 257 563 837 1,003 1,158
120,000 130,000 294 643 955 1,145 1,323
130,000 140,000 330 723 1,074 1,288 1,486
140,000 150,000 366 804 1,192 1,430 1,651
150,000 160,000 403 883 1,311 1,573 1,815
160,000 170,000 439 963 1,430 1,715 1,980
170,000 180,000 476 1,043 1,549 1,857 2,144
180,000 190,000 512 1,123 1,668 1,999 2,309
190,000 200,000 548 1,203 1,786 2,142 2,473
200,000 210,000 585 1,283 1,905 2,284 2,637
210,000 220,000 621 1,363 2,024 2,426 2,802
220,000 230,000 658 1,443 2,142 2,569 2,966
230,000 240,000 694 1,523 2,261 2,711 3,131
240,000 250,000 730 1,603 2,380 2,854 3,294

04. Maximum Automobile Value for Using the Cents-per-mile Valuation Rule.

(1) Amount of Adjustment. Under § 1.61-21(e)(1)(iii)(A), the limitation on the fair market value of an employer-provided passenger automobile first made available to any employee for personal use after 1988 is to be adjusted in accordance with § 280F(d)(7). Accordingly, the adjustment for any calendar year is the percentage (if any) by which the CPI automobile component for October of the preceding calendar year exceeds the CPI automobile component for October 1987. See, section 4.02(1) of this revenue procedure. The new car component of the CPI was 115.2 for October 1987 and 133.5 for October 2003. The October 2003 index exceeded the October 1987 index by 18.3. The Service has, therefore, determined that the adjustment for 2004 is 15.89 percent (18.3/115.2 x 100%). This adjustment is applicable to all employer-provided passenger automobiles first made available to any employee for personal use in calendar year 2004. The maximum fair market value specified in § 1.61-21(e)(1)(iii)(A) must therefore be multiplied by a factor of 0.1589, and the resulting increase, after rounding to the nearest $100, is added to $12,800 to give the maximum value for calendar year 2004.

(2) The Maximum Automobile Value. For passenger automobiles first made available in calendar year 2004 to any employee of the employer for personal use, the vehicle cents-per-mile valuation rule may be applicable if the fair market value of the passenger automobile on the date it is first made available does not exceed $14,800.

SECTION 5. EFFECTIVE DATE

This revenue procedure applies to passenger automobiles (other than leased passenger automobiles) that are first placed in service by the taxpayer during calendar year 2004, to leased passenger automobiles that are first leased by the taxpayer during calendar year 2004, and to employer-provided passenger automobiles first made available to employees for personal use in calendar year 2004.

SECTION 6. DRAFTING INFORMATION

The principal author of this revenue procedure is Bernard P. Harvey of the Office of Associate Chief Counsel (Passthroughs & Special Industries). For further information regarding the depreciation limitations and lessee inclusion amounts in this revenue procedure, contact Bernard P. Harvey at (202) 622-3110 (not a toll-free call); for further information regarding the maximum automobile value for applying the vehicle cents-per-mile valuation rule, contact Dan E. Boeskin of the Office of the Associate Chief Counsel (Tax Exempt and Government Entities) at (202) 622-6040 (not toll-free calls).


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