Internal Revenue Bulletin:  2007-18 

April 30, 2007 

Rev. Proc. 2007-30


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 2007, including a separate table of limitations on depreciation deductions for trucks and vans; and (2) the amounts to be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2007, including a separate table of inclusion amounts for lessees of trucks and vans.

02. The tables detailing these depreciation limitations and lessee inclusion amounts reflect the automobile price inflation adjustments required by § 280F(d)(7).

03. Section 280F(a)(1)(C), which directed the use of higher depreciation deduction limits for certain electric automobiles, was applicable only to property placed in service after December 31, 2001 and before January 1, 2007. Accordingly, separate tables are no longer provided for electric automobiles, and taxpayers should use the applicable table provided in this revenue procedure.

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. 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. 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 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.

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 2007, 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 2007. 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, Rev. Proc. 2003-75, 2003-2 C.B. 1018, for passenger automobiles first leased during calendar year 2003, Rev. Proc. 2004-20, 2004-1 C.B. 642, for passenger automobiles first leased during calendar year 2004, Rev. Proc. 2005-13, 2005-1 C.B. 759, for passenger automobiles first leased during calendar year 2005, and Rev. Proc. 2006-18, 2006-1 C.B. 645, for passenger automobiles first leased during calendar year 2006.

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 2007 are found in Tables 1 and 2 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 or van). Table 2 of this revenue procedure provides limitations on depreciation deductions for a truck or van.

(2) Inclusions in Income of Lessees of Passenger Automobiles. A taxpayer first leasing a passenger automobile during calendar year 2007 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 3 in the case of a passenger automobile (other than a truck or van), and Table 4 in the case of a truck or van. In addition, the procedures of § 1.280F-7(a) must be followed.

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 136.3 for October 2006. The October 2006 index exceeded the October 1987 index by 21.1. The Service has, therefore, determined that the automobile price inflation adjustment for 2007 for passenger automobiles (other than trucks and vans) is 18.32 percent (21.1/115.2 x 100%). This adjustment is applicable to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2007. The dollar limitations in § 280F(a) must therefore be multiplied by a factor of 0.1832, 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 and vans) for calendar year 2007. To determine the dollar limitations applicable to trucks and vans first placed in service during calendar year 2007, 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 141.4 for October 2006. The October 2006 index exceeded the October 1987 index by 29.0. The Service has, therefore, determined that the automobile price inflation adjustment for 2007 for trucks and vans is 25.80 percent (29.0/112.4 x 100%). This adjustment is applicable to all trucks and vans that are first placed in service in calendar year 2007. The dollar limitations in § 280F(a) must therefore be multiplied by a factor of 0.2580, 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 2007, Tables 1 and 2 contain the dollar amount of the depreciation limitation for each tax year. Use Table 1 for passenger automobiles placed in service by the taxpayer in calendar year 2007. Use Table 2 for trucks and vans placed in service by the taxpayer in calendar year 2007.

REV. PROC. 2007-30 TABLE 1
DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES PLACED IN SERVICE BY THE TAXPAYER DURING CALENDAR YEAR 2007
Tax Year Amount
1st Tax Year $3,060
2nd Tax Year $4,900
3rd Tax Year $2,850
Each Succeeding Year $1,775
REV. PROC. 2007-30 TABLE 2
DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE BY THE TAXPAYER DURING CALENDAR YEAR 2007
Tax Year Amount
1st Tax Year $3,260
2nd Tax Year $5,200
3rd Tax Year $3,050
Each Succeeding Year $1,875

03. Inclusions in Income of Lessees of Passenger Automobiles.

The inclusion amounts for passenger automobiles first leased in calendar year 2007 are calculated under the procedures described in § 1.280F-7(a). Lessees of passenger automobiles other than trucks and vans should use Table 3 of this revenue procedure in applying these procedures, while lessees of trucks and vans should use Table 4 of this revenue procedure.

REV. PROC. 2007-30 TABLE 3
DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2007
Fair Market Value of Passenger Automobile Tax Year During Lease
Over Not Over 1st 2nd 3rd 4th 5th & later
$15,500 $15,800 2 5 11 11 13
15,800 16,100 4 10 17 19 22
16,100 16,400 6 14 24 28 31
16,400 16,700 9 18 31 35 41
16,700 17,000 11 23 37 43 50
17,000 17,500 13 29 46 54 62
17,500 18,000 17 37 56 68 77
18,000 18,500 20 44 68 81 93
18,500 19,000 24 51 80 94 108
19,000 19,500 27 59 90 108 124
19,500 20,000 30 67 101 121 139
20,000 20,500 34 74 113 134 154
20,500 21,000 37 82 123 148 170
21,000 21,500 41 89 135 161 185
21,500 22,000 44 97 146 174 201
22,000 23,000 49 108 163 194 224
23,000 24,000 56 123 185 221 255
24,000 25,000 63 138 207 248 285
25,000 26,000 70 153 229 275 316
26,000 27,000 77 168 251 302 347
27,000 28,000 83 183 274 328 378
28,000 29,000 90 198 296 355 409
29,000 30,000 97 213 318 382 439
30,000 31,000 104 228 341 408 470
31,000 32,000 111 243 363 435 501
32,000 33,000 118 258 385 461 532
33,000 34,000 125 273 407 488 563
34,000 35,000 131 288 430 515 593
35,000 36,000 138 303 452 542 624
36,000 37,000 145 318 474 568 656
37,000 38,000 152 333 496 595 686
38,000 39,000 159 348 519 621 717
39,000 40,000 166 363 541 648 748
40,000 41,000 172 378 564 674 779
41,000 42,000 179 393 586 701 810
42,000 43,000 186 408 608 728 840
43,000 44,000 193 423 630 755 871
44,000 45,000 200 438 652 782 902
45,000 46,000 207 453 674 809 933
46,000 47,000 213 468 697 835 964
47,000 48,000 220 483 719 862 995
48,000 49,000 227 498 742 888 1,025
49,000 50,000 234 513 764 915 1,056
50,000 51,000 241 528 786 942 1,087
51,000 52,000 248 543 808 969 1,117
52,000 53,000 254 558 831 995 1,148
53,000 54,000 261 573 853 1,022 1,179
54,000 55,000 268 588 875 1,049 1,210
55,000 56,000 275 603 897 1,076 1,241
56,000 57,000 282 618 920 1,102 1,271
57,000 58,000 289 633 942 1,128 1,303
58,000 59,000 296 648 964 1,155 1,334
59,000 60,000 302 663 987 1,182 1,364
60,000 62,000 313 685 1,020 1,222 1,411
62,000 64,000 326 716 1,064 1,276 1,472
64,000 66,000 340 746 1,108 1,329 1,534
66,000 68,000 354 775 1,154 1,382 1,595
68,000 70,000 367 806 1,198 1,435 1,657
70,000 72,000 381 836 1,242 1,489 1,719
72,000 74,000 395 865 1,287 1,543 1,780
74,000 76,000 408 896 1,331 1,596 1,842
76,000 78,000 422 926 1,376 1,649 1,903
78,000 80,000 436 955 1,421 1,703 1,965
80,000 85,000 460 1,008 1,498 1,796 2,074
85,000 90,000 494 1,083 1,610 1,929 2,228
90,000 95,000 528 1,158 1,721 2,063 2,382
95,000 100,000 562 1,233 1,833 2,196 2,536
100,000 110,000 614 1,346 1,999 2,396 2,767
110,000 120,000 682 1,496 2,222 2,663 3,075
120,000 130,000 750 1,646 2,444 2,931 3,383
130,000 140,000 819 1,796 2,667 3,197 3,692
140,000 150,000 887 1,946 2,890 3,464 4,000
150,000 160,000 956 2,096 3,112 3,731 4,308
160,000 170,000 1,024 2,246 3,335 3,998 4,616
170,000 180,000 1,093 2,396 3,557 4,266 4,924
180,000 190,000 1,161 2,546 3,780 4,532 5,233
190,000 200,000 1,229 2,696 4,003 4,799 5,541
200,000 210,000 1,298 2,846 4,225 5,067 5,848
210,000 220,000 1,366 2,996 4,448 5,333 6,157
220,000 230,000 1,435 3,146 4,671 5,600 6,465
230,000 240,000 1,503 3,296 4,893 5,867 6,774
240,000 and up 1,571 3,446 5,116 6,134 7,082
REV. PROC. 2007-30 TABLE 4
DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2007
Fair Market Value of Truck or Van Tax Year During Lease
Over Not Over 1st 2nd 3rd 4th 5th and later
$16,400 $16,700 2 4 8 10 11
16,700 17,000 4 9 15 17 21
17,000 17,500 6 15 24 28 33
17,500 18,000 10 22 35 42 48
18,000 18,500 13 30 46 55 64
18,500 19,000 17 37 57 69 79
19,000 19,500 20 45 68 82 94
19,500 20,000 24 52 80 95 109
20,000 20,500 27 60 90 109 125
20,500 21,000 30 67 102 122 141
21,000 21,500 34 75 113 135 156
21,500 22,000 37 82 124 149 171
22,000 23,000 42 94 140 169 194
23,000 24,000 49 109 163 195 225
24,000 25,000 56 123 186 222 256
25,000 26,000 63 138 208 249 286
26,000 27,000 70 153 230 276 317
27,000 28,000 77 168 252 302 349
28,000 29,000 83 184 274 329 379
29,000 30,000 90 199 296 356 410
30,000 31,000 97 214 318 383 440
31,000 32,000 104 228 342 408 472
32,000 33,000 111 243 364 435 503
33,000 34,000 118 258 386 462 534
34,000 35,000 125 273 408 489 564
35,000 36,000 131 289 430 515 595
36,000 37,000 138 304 452 542 626
37,000 38,000 145 318 475 569 657
38,000 39,000 152 333 497 596 688
39,000 40,000 159 348 520 622 718
40,000 41,000 166 363 542 649 749
41,000 42,000 172 379 563 676 780
42,000 43,000 179 394 586 702 811
43,000 44,000 186 409 608 729 842
44,000 45,000 193 423 631 756 872
45,000 46,000 200 438 653 783 903
46,000 47,000 207 453 675 810 934
47,000 48,000 213 469 697 836 965
48,000 49,000 220 484 719 863 996
49,000 50,000 227 499 741 890 1,026
50,000 51,000 234 514 764 916 1,057
51,000 52,000 241 528 787 943 1,088
52,000 53,000 248 543 809 969 1,119
53,000 54,000 254 559 831 996 1,150
54,000 55,000 261 574 853 1,023 1,180
55,000 56,000 268 589 875 1,050 1,211
56,000 57,000 275 604 897 1,076 1,243
57,000 58,000 282 618 920 1,103 1,273
58,000 59,000 289 633 943 1,129 1,304
59,000 60,000 296 648 965 1,156 1,335
60,000 62,000 306 671 998 1,196 1,381
62,000 64,000 319 701 1,043 1,249 1,443
64,000 66,000 333 731 1,087 1,303 1,504
66,000 68,000 347 761 1,131 1,357 1,566
68,000 70,000 361 791 1,176 1,410 1,627
70,000 72,000 374 821 1,221 1,463 1,689
72,000 74,000 388 851 1,265 1,517 1,751
74,000 76,000 402 881 1,309 1,570 1,813
76,000 78,000 415 911 1,354 1,624 1,874
78,000 80,000 429 941 1,399 1,676 1,936
80,000 85,000 453 994 1,476 1,770 2,044
85,000 90,000 487 1,069 1,587 1,904 2,198
90,000 95,000 521 1,144 1,699 2,037 2,352
95,000 100,000 555 1,219 1,810 2,171 2,506
100,000 110,000 607 1,331 1,977 2,371 2,737
110,000 120,000 675 1,481 2,200 2,638 3,045
120,000 130,000 744 1,631 2,423 2,904 3,354
130,000 140,000 812 1,781 2,646 3,171 3,662
140,000 150,000 880 1,932 2,867 3,439 3,970
150,000 160,000 949 2,081 3,091 3,705 4,279
160,000 170,000 1,017 2,232 3,313 3,972 4,586
170,000 180,000 1,086 2,381 3,536 4,239 4,895
180,000 190,000 1,154 2,532 3,758 4,506 5,203
190,000 200,000 1,222 2,682 3,981 4,773 5,511
200,000 210,000 1,291 2,831 4,204 5,040 5,820
210,000 220,000 1,359 2,982 4,426 5,307 6,128
220,000 230,000 1,428 3,131 4,649 5,575 6,435
230,000 240,000 1,496 3,282 4,871 5,841 6,744
240,000 and up 1,565 3,431 5,095 6,108 7,052

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 2007, and to leased passenger automobiles that are first leased by the taxpayer during calendar year 2007.

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).


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