2020 Depreciation Limits
Posted on Monday, August 24, 2020
ShareThe IRS has issued Revenue Procedure 2020-37 with limitations on depreciation deductions for passenger automobiles (including trucks and vans) placed in service during calendar year 2020. For passenger automobiles places in service after 2018, the IRS adjusts the amounts allowable as depreciations deductions by a price inflation adjustment amount.
For passenger automobiles placed in service during 2020, the following depreciation limitations apply when electing bonus depreciation:
The bonus depreciation deduction does not apply for 2020 if the taxpayer did not use the passenger automobile more than 50 percent for business purposes.
For passenger automobiles placed in service during 2020, the following depreciation limitations apply when not electing bonus depreciation:
Revenue Procedure 2020-37 also includes a table applicable to lessees of passenger automobiles, which shows income inclusion amounts for a range of fair market values for each taxable year after the passenger automobile is first leased.
Contributed By: Zach Richards, CPA, CFE | Director | DWD CPAs & Advisors
Posted in Tax Topics For Individuals
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