The Internal Revenue Service has issued guidance updating the limitations on depreciation deductions for new automobiles.
Revenue Procedure 2016-23 provides guidance regarding the limitations on depreciation deductions for owners of passenger automobiles first placed in service by the taxpayer during calendar year 2016, amounts that must be included in income by lessees of passenger automobiles first leased by the taxpayer during calendar year 2016.
The guidance also includes revised depreciation limitations and lessee inclusion amounts for passenger automobiles that were first placed in service or first leased by the taxpayer, respectively, during 2015 and to which the additional first-year depreciation deduction under section 168(k) applies.
The amounts are updated following the extension of the additional first-year depreciation deduction by the Protecting Americans from Tax Hikes Act of 2015, enacted as part of the Consolidated Appropriations Act of 2016.
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