Internal Revenue Bulletin:  2009-17 

April 27, 2009 

Rev. Proc. 2009-24


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 2009, 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 2009, 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) of the Internal Revenue Code.

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.

.02 Section 168(k)(1)(A) provides a 50 percent additional first year depreciation deduction for certain new property acquired by a taxpayer after December 31, 2007, and before January 1, 2010, if no written binding contract for the acquisition of the property existed before January 1, 2008. Section 168(k)(2)(F)(i) increases the first year depreciation allowed under § 280F(a)(1)(A) by $8,000 for passenger automobiles to which the 50 percent additional first year depreciation deduction applies.

.03 Section 168(k)(2)(D)(i) provides that the 50 percent additional first year depreciation deduction does not apply to any property required to be depreciated under the alternative depreciation system of § 168(g), including property described in § 280F(b)(1). Section 168(k)(2)(D)(iii) permits a taxpayer to elect to not claim the 50 percent additional first year depreciation deduction for any class of property. Section 168(k)(4) permits a corporation to elect to not claim the 50 percent additional first year depreciation deduction for all eligible qualified property (that is extension property or that is not extension property, as applicable) and instead to increase the business credit limitation under § 38(c) or the alternative minimum tax credit limitation under § 53(c). Accordingly, this revenue procedure provides tables for passenger automobiles for which the 50 percent additional depreciation deduction applies and tables for passenger automobiles for which the 50 percent additional first year depreciation deduction does not apply, including passenger automobiles in a class of property for which the taxpayer “elects out” of the 50 percent additional first year depreciation deduction or passenger automobiles that are eligible qualified property to which the § 168(k)(4) election applies.

.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) of the Income Tax Regulations, this reduction requires a lessee to include in gross income an inclusion amount determined by applying a formula to the amount obtained from a table. One table applies to lessees of trucks and vans and another table applies to all other passenger automobiles. Each table shows inclusion amounts for a range of fair market values for each taxable 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 2009, and continue to apply for each taxable 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 2009. Lessees of these passenger automobiles must use these tables to determine the inclusion amount for each taxable 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, Rev. Proc. 2006-18, 2006-1 C.B. 645, for passenger automobiles first leased during calendar year 2006, Rev. Proc. 2007-30, 2007-1 C.B. 1104, for passenger automobiles first leased during calendar year 2007, and Rev. Proc. 2008-22, 2008-12 I.R.B. 658, for passenger automobiles first leased during calendar year 2008.

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 2009 are in Tables 1 through 4 in section 4.02(2) of this revenue procedure.

(2) Inclusions in income of lessees of passenger automobiles. A taxpayer first leasing a passenger automobile during calendar year 2009 must determine the inclusion amount that is added to gross income using Tables 5 and 6 in section 4.03 of this revenue procedure. In addition, the taxpayer must follow the procedures of § 1.280F-7(a).

.02 Limitations on Depreciation Deductions for Certain Automobiles.

(1) Amount of the inflation adjustment.

(a) Passenger automobiles (other than trucks or vans). 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 new car component of the CPI was 115.2 for October 1987 and 134.837 for October 2008. The October 2008 index exceeded the October 1987 index by 19.637. The Internal Revenue Service has, therefore, determined that the automobile price inflation adjustment for 2009 for passenger automobiles (other than trucks and vans) is 17.05 percent (19.637/115.2 x 100%). This adjustment is applicable to all passenger automobiles (other than trucks and vans) that are first placed in service in calendar year 2009. The dollar limitations in § 280F(a) therefore must be multiplied by a factor of 0.1705, 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 2009.

(b) Trucks and vans. To determine the dollar limitations applicable to trucks and vans first placed in service during calendar year 2009, 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 133.640 for October 2008. The October 2008 index exceeded the October 1987 index by 21.24. The Service has, therefore, determined that the automobile price inflation adjustment for 2009 for trucks and vans is 18.90 percent (21.24/112.4 x 100%). This adjustment is applicable to all trucks and vans that are first placed in service in calendar year 2009. The dollar limitations in § 280F(a) therefore must be multiplied by a factor of 0.1890, 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 2009, Tables 1 through 4 contain the dollar amount of the depreciation limitation for each taxable year. Use Table 1 for a passenger automobile (other than a truck or van) placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction does not apply, including a passenger automobile (other than a truck or van) in a class of property for which the taxpayer elects out of the 50 percent additional first year depreciation deduction or a passenger automobile that is eligible qualified property to which the § 168(k)(4) election applies. Use Table 2 for a passenger automobile (other than a truck or van) placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction applies. Use Table 3 for a truck or van placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction does not apply, including a truck or van in a class of property for which the taxpayer elects out of the 50 percent additional first year depreciation deduction or a truck or van that is eligible qualified property to which the § 168(k)(4) election applies. Use Table 4 for a truck or van placed in service by the taxpayer in calendar year 2009, for which the 50 percent additional first year depreciation deduction applies.

REV. PROC. 2009-24 TABLE 1
DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY
Tax Year Amount
1st Tax Year $2,960
2nd Tax Year $4,800
3rd Tax Year $2,850
Each Succeeding Year $1,775
REV. PROC. 2009-24 TABLE 2
DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES
Tax Year Amount
1st Tax Year $10,960
2nd Tax Year $4,800
3rd Tax Year $2,850
Each Succeeding Year $1,775
REV. PROC. 2009-24 TABLE 3
DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION DOES NOT APPLY
Tax Year Amount
1st Tax Year $3,060
2nd Tax Year $4,900
3rd Tax Year $2,950
Each Succeeding Year $1,775
REV. PROC. 2009-24 TABLE 4
DEPRECIATION LIMITATIONS FOR TRUCKS AND VANS PLACED IN SERVICE BY THE TAXPAYER IN CALENDAR YEAR 2009, FOR WHICH THE 50 PERCENT ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES
Tax Year Amount
1st Tax Year $11,060
2nd Tax Year $4,900
3rd Tax Year $2,950
Each Succeeding Year $1,775

.03 Inclusions in Income of Lessees of Passenger Automobiles.

The inclusion amounts for passenger automobiles first leased in calendar year 2009 are calculated under the procedures described in § 1.280F-7(a). Lessees of passenger automobiles other than trucks and vans should use Table 5 of this revenue procedure in applying these procedures, while lessees of trucks and vans should use Table 6 of this revenue procedure.

REV. PROC. 2009-24 TABLE 5
DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES (THAT ARE NOT TRUCKS OR VANS) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2009
Fair Market Value of Passenger Automobile Tax Year During Lease
Over Not Over 1st 2nd 3rd 4th 5th & Later
$18,500 $19,000 9 19 28 34 38
19,000 19,500 10 21 32 38 43
19,500 20,000 11 24 36 42 48
20,000 20,500 12 27 39 46 54
20,500 21,000 13 29 43 51 58
21,000 21,500 15 31 47 55 64
21,500 22,000 16 34 50 60 68
22,000 23,000 17 38 56 66 76
23,000 24,000 20 42 64 75 86
24,000 25,000 22 47 71 84 96
25,000 26,000 24 52 78 93 107
26,000 27,000 26 58 85 101 117
27,000 28,000 29 62 93 110 127
28,000 29,000 31 67 100 119 138
29,000 30,000 33 72 108 128 147
30,000 31,000 35 77 115 137 157
31,000 32,000 38 82 122 146 167
32,000 33,000 40 87 129 155 178
33,000 34,000 42 92 137 163 188
34,000 35,000 44 97 144 172 199
35,000 36,000 47 102 151 181 208
36,000 37,000 49 107 159 189 219
37,000 38,000 51 112 166 199 228
38,000 39,000 53 117 173 208 239
39,000 40,000 56 122 180 216 250
40,000 41,000 58 127 188 225 259
41,000 42,000 60 132 195 234 269
42,000 43,000 62 137 203 242 280
43,000 44,000 65 141 210 252 290
44,000 45,000 67 146 218 260 300
45,000 46,000 69 151 225 269 311
46,000 47,000 71 157 232 278 320
47,000 48,000 74 161 240 286 331
48,000 49,000 76 166 247 296 340
49,000 50,000 78 171 255 304 351
50,000 51,000 80 176 262 313 361
51,000 52,000 83 181 269 322 371
52,000 53,000 85 186 276 331 381
53,000 54,000 87 191 284 339 392
54,000 55,000 89 196 291 349 401
55,000 56,000 92 201 298 357 412
56,000 57,000 94 206 306 365 423
57,000 58,000 96 211 313 375 432
58,000 59,000 98 216 320 384 442
59,000 60,000 101 221 327 393 452
60,000 62,000 104 228 339 406 467
62,000 64,000 109 238 353 424 488
64,000 66,000 113 248 368 441 509
66,000 68,000 118 258 382 459 529
68,000 70,000 122 268 397 476 550
70,000 72,000 127 277 413 493 570
72,000 74,000 131 288 427 511 590
74,000 76,000 136 297 442 529 610
76,000 78,000 140 307 457 546 631
78,000 80,000 145 317 471 564 651
80,000 85,000 152 335 497 595 686
85,000 90,000 164 359 534 639 737
90,000 95,000 175 384 570 683 789
95,000 100,000 186 409 607 727 839
100,000 110,000 203 446 662 793 916
110,000 120,000 226 495 736 881 1,018
120,000 130,000 248 545 809 970 1,119
130,000 140,000 271 594 883 1,058 1,220
140,000 150,000 293 644 956 1,146 1,322
150,000 160,000 316 693 1,030 1,234 1,424
160,000 170,000 338 743 1,103 1,322 1,526
170,000 180,000 361 792 1,177 1,410 1,628
180,000 190,000 383 842 1,250 1,498 1,730
190,000 200,000 406 891 1,324 1,586 1,831
200,000 210,000 428 941 1,397 1,675 1,932
210,000 220,000 451 990 1,471 1,762 2,035
220,000 230,000 473 1,040 1,544 1,851 2,136
230,000 240,000 496 1,089 1,618 1,939 2,238
240,000 And up 518 1,139 1,691 2,027 2,340
REV. PROC. 2009-24 TABLE 6
DOLLAR AMOUNTS FOR TRUCKS AND VANS WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2009
Fair Market Value of Electric Automobile Tax Year During Lease
Over Not Over 1st 2nd 3rd 4th 5th and Later
$18,500 $19,000 8 17 25 30 35
19,000 19,500 9 19 29 35 40
19,500 20,000 10 22 33 38 45
20,000 20,500 11 25 36 43 50
20,500 21,000 12 27 40 48 55
21,000 21,500 13 30 43 52 60
21,500 22,000 15 32 47 56 66
22,000 23,000 16 36 52 64 72
23,000 24,000 18 41 60 72 83
24,000 25,000 21 45 68 81 93
25,000 26,000 23 50 75 90 103
26,000 27,000 25 56 82 98 114
27,000 28,000 27 61 89 107 124
28,000 29,000 30 65 97 116 134
29,000 30,000 32 70 104 125 144
30,000 31,000 34 75 112 134 154
31,000 32,000 36 80 119 143 164
32,000 33,000 39 85 126 151 175
33,000 34,000 41 90 134 160 184
34,000 35,000 43 95 141 169 195
35,000 36,000 45 100 148 178 205
36,000 37,000 48 105 155 187 215
37,000 38,000 50 110 163 195 226
38,000 39,000 52 115 170 204 236
39,000 40,000 55 120 177 213 246
40,000 41,000 57 125 185 221 256
41,000 42,000 59 130 192 231 266
42,000 43,000 61 135 199 240 276
43,000 44,000 64 139 207 249 286
44,000 45,000 66 144 215 257 296
45,000 46,000 68 149 222 266 307
46,000 47,000 70 155 229 274 317
47,000 48,000 73 159 237 283 327
48,000 49,000 75 164 244 292 338
49,000 50,000 77 169 251 301 348
50,000 51,000 79 174 259 310 357
51,000 52,000 82 179 266 318 368
52,000 53,000 84 184 273 328 378
53,000 54,000 86 189 281 336 388
54,000 55,000 88 194 288 345 399
55,000 56,000 91 199 295 354 408
56,000 57,000 93 204 302 363 419
57,000 58,000 95 209 310 371 429
58,000 59,000 97 214 317 381 439
59,000 60,000 100 219 324 389 450
60,000 62,000 103 226 336 402 465
62,000 64,000 107 236 351 420 485
64,000 66,000 112 246 365 438 505
66,000 68,000 116 256 380 455 526
68,000 70,000 121 266 394 473 546
70,000 72,000 125 276 409 491 566
72,000 74,000 130 286 423 509 586
74,000 76,000 134 296 438 526 607
76,000 78,000 139 305 454 543 627
78,000 80,000 143 316 467 561 648
80,000 85,000 151 333 493 592 684
85,000 90,000 163 357 531 635 735
90,000 95,000 174 382 567 680 785
95,000 100,000 185 407 604 724 836
100,000 110,000 202 444 659 790 912
110,000 120,000 225 493 733 878 1,014
120,000 130,000 247 543 806 966 1,116
130,000 140,000 270 592 880 1,054 1,218
140,000 150,000 292 642 953 1,143 1,319
150,000 160,000 315 691 1,027 1,230 1,421
160,000 170,000 337 741 1,100 1,319 1,522
170,000 180,000 360 790 1,174 1,407 1,624
180,000 190,000 382 840 1,247 1,495 1,726
190,000 200,000 405 889 1,321 1,583 1,828
200,000 210,000 427 939 1,394 1,671 1,930
210,000 220,000 450 988 1,468 1,759 2,031
220,000 230,000 472 1,038 1,541 1,847 2,134
230,000 240,000 495 1,087 1,615 1,935 2,235
240,000 and up 517 1,137 1,688 2,024 2,336

SECTION 5. EFFECTIVE DATE

This revenue procedure applies to passenger automobiles (other than leased passenger automobiles) that are first placed in service by a taxpayer during calendar year 2009, and to leased passenger automobiles that are first leased by a taxpayer during calendar year 2009.

SECTION 6. DRAFTING INFORMATION

The principal author of this revenue procedure is Bernard P. Harvey of the Office of Associate Chief Counsel (Income Tax & Accounting). For further information regarding this revenue procedure, contact Mr. Harvey at (202) 622-4930 (not a toll-free call).


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