SECTION 4. APPLICATION — Internal Revenue Bulletin 1998-17

A taxpayer placing an automobile in service for the first time during calendar year 1998 is limited to the depreciation deduction shown in Table 1 of section 4.02(2) or, in the case of an electric automobile, Table 2. A taxpayer first leasing an automobile in calendar year 1998 must determine the inclusion amount that is added to gross income using Table 3 of section 4.03 or, in the case of an electric automobile, Table 4. Otherwise, the procedures of § 1.280F– 7(a) must be followed. An employer providing an automobile for the first time in calendar year 1998 for the personal use of any employee may determine the value of the use of the automobile by using the cents-per-mile valuation rule in § 1.61– 21(e) if the fair market value of the automobile does not exceed the amount specified in section 4.04(2). If the fair market value of the automobile exceeds the amount specified in section 4.04(2), the employer may determine the value of the use of the 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.
Limitations on Depreciation De- ductions for Certain Automobiles.

(1) Amount of the Inflation Adjust- ment. 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

DEPRECIATION LIMITATIONS

FOR AUTOMOBILES (OTHER

THAN ELECTRIC AUTOMOBILES) FIRST PLACED IN SERVICE IN CALENDAR YEAR 1998

Tax Year Amount

1st Tax Year $3,160 2nd Tax Year $5,000 3rd Tax Year $2,950 Each Succeeding Year $1,775

1998–17 I.R.B. 7 April 27, 1998

April 27, 1998 8 1998–17 I.R.B.

REV. PROC. 98–30 TABLE 3—Continued
DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN ELECTRIC AUTOMOBILES)
WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 1998

Fair Market Value of Automobile Over Not Over	Tax Year During Lease	Tax Year During Lease	Tax Year During Lease	Tax Year During Lease	Tax Year During Lease
Fair Market Value of Automobile Over Not Over	1st	2nd	3rd	4th	5th and Later
40,000 41,000 41,000 42,000 42,000 43,000 43,000 44,000 44,000 45,000 45,000 46,000 46,000 47,000 47,000 48,000 48,000 49,000 49,000 50,000 50,000 51,000 51,000 52,000 52,000 53,000 53,000 54,000 54,000 55,000 55,000 56,000 56,000 57,000 57,000 58,000 58,000 59,000 59,000 60,000 60,000 62,000 62,000 64,000 64,000 66,000 66,000 68,000 68,000 70,000 70,000 72,000 72,000 74,000 74,000 76,000 76,000 78,000 78,000 80,000 80,000 85,000 85,000 90,000 90,000 95,000 95,000 100,000 100,000 110,000 110,000 120,000 120,000 130,000 130,000 140,000 140,000 150,000 150,000 160,000 160,000 170,000 170,000 180,000 180,000 190,000 190,000 200,000 200,000 210,000 210,000 220,000 220,000 230,000 230,000 240,000 240,000 250,000	202 210 218 227 235 243 251 259 268 276 284 292 300 308 317 325 333 341 349 358 370 386 403 419 435 452 468 484 501 517 546 587 627 668 730 812 893 975 1,057 1,139 1,221 1,302 1,384 1,466 1,548 1,630 1,712 1,793 1,875	445 463 481 498 516 534 552 570 588 606 624 642 660 678 695 713 732 750 768 785 812 848 884 920 956 991 1,027 1,063 1,099 1,135 1,198 1,287 1,377 1,467 1,601 1,780 1,960 2,139 2,318 2,498 2,677 2,857 3,036 3,215 3,394 3,574 3,753 3,932 4,112	662 688 715 742 769 795 822 849 875 901 928 955 981 1,008 1,035 1,062 1,087 1,114 1,140 1,168 1,207 1,261 1,313 1,367 1,420 1,474 1,527 1,580 1,633 1,686 1,779 1,913 2,046 2,178 2,378 2,644 2,910 3,176 3,443 3,708 3,974 4,240 4,506 4,772 5,039 5,304 5,570 5,837 6,102	794 827 859 891 922 955 986 1,018 1,050 1,082 1,114 1,145 1,178 1,209 1,241 1,273 1,305 1,337 1,369 1,400 1,449 1,512 1,577 1,640 1,704 1,767 1,832 1,896 1,959 2,023 2,134 2,294 2,453 2,613 2,852 3,172 3,490 3,810 4,128 4,447 4,766 5,085 5,404 5,724 6,042 6,361 6,680 6,999 7,318	919 955 992 1,028 1,066 1,102 1,140 1,176 1,213 1,250 1,286 1,324 1,360 1,398 1,434 1,471 1,508 1,544 1,582 1,619 1,674 1,747 1,821 1,894 1,968 2,042 2,115 2,189 2,263 2,337 2,466 2,649 2,834 3,018 3,294 3,662 4,031 4,398 4,767 5,135 5,504 5,872 6,241 6,608 6,977 7,345 7,714 8,082 8,450

1998–17 I.R.B. 9 April 27, 1998

REV. PROC. 98–30 TABLE 4
DOLLAR AMOUNTS FOR ELECTRIC AUTOMOBILES
WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 1998

Fair Market Value of Automobile Over Not Over	Tax Year During Lease	Tax Year During Lease	Tax Year During Lease	Tax Year During Lease	Tax Year During Lease
Fair Market Value of Automobile Over Not Over	1st	2nd	3rd	4th	5th and Later
$ 47,000 48,000 48,000 49,000 49,000 50,000 50,000 51,000 51,000 52,000 52,000 53,000 53,000 54,000 54,000 55,000 55,000 56,000 56,000 57,000 57,000 58,000 58,000 59,000 59,000 60,000 60,000 62,000 62,000 64,000 64,000 66,000 66,000 68,000 68,000 70,000 70,000 72,000 72,000 74,000 74,000 76,000 76,000 78,000 78,000 80,000 80,000 85,000 85,000 90,000 90,000 95,000 95,000 100,000 100,000 110,000 110,000 120,000 120,000 130,000 130,000 140,000 140,000 150,000 150,000 160,000 160,000 170,000 170,000 180,000 180,000 190,000 190,000 200,000 200,000 210,000 210,000 220,000 220,000 230,000 230,000 240,000 240,000 250,000	5 13 21 29 38 46 54 62 70 79 87 95 103 115 132 148 164 181 197 214 230 246 263 291 332 373 414 475 557 639 721 803 884 966 1,048 1,130 1,212 1,293 1,375 1,457 1,539 1,621	11 29 47 65 83 101 119 137 155 172 190 208 226 253 289 325 361 396 432 468 504 540 576 639 728 818 908 1,042 1,221 1,401 1,580 1,759 1,939 2,118 2,297 2,477 2,656 2,835 3,015 3,194 3,373 3,552	18 45 71 98 124 151 177 204 231 258 284 311 338 378 430 484 537 591 644 697 750 803 856 949 1,083 1,215 1,348 1,548 1,814 2,080 2,346 2,612 2,878 3,144 3,410 3,676 3,942 4,209 4,474 4,740 5,006 5,273	21 52 85 116 148 180 212 244 275 307 340 372 403 451 515 578 643 706 770 834 898 962 1,025 1,137 1,296 1,456 1,615 1,855 2,174 2,492 2,812 3,131 3,450 3,769 4,088 4,406 4,726 5,044 5,364 5,683 6,002 6,320	23 60 96 134 171 207 244 281 318 355 391 428 465 520 594 668 741 815 888 962 1,035 1,109 1,183 1,312 1,496 1,681 1,865 2,141 2,509 2,878 3,245 3,614 3,982 4,350 4,719 5,087 5,455 5,824 6,191 6,560 6,928 7,297

April 27, 1998 10 1998–17 I.R.B.

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 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).) The new car component of the CPI was 115.2 for October 1987 and 140.6 for October 1997. The October 1997 index exceeded the October 1987 index by 25.4. The Internal Revenue Service has, therefore, determined that the adjustment for 1998 is 22.05 percent (25.4/115.2 � 100%). This adjustment is applicable to all employer-provided automobiles first made available to any employee for personal use in calendar year 1998. The maximum fair market value specified in § 1.61–21(e)(1)(iii)(A) must therefore be multiplied by a factor of 0.2205, and the resulting increase, after rounding to the nearest $100, is added to $12,800 to give the maximum value for 1998. (2) The Maximum Automobile Value. For automobiles first made available in calendar year 1998 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 automobile on the date it is first made available does not exceed $15,600.