SECTION 4. APPLICATION

1. A taxpayer placing an automobile in service for the first time during calendar year 1999 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 1999 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 1999 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 § 1.6121(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.

2. 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 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 139.7 for October 1998. The October 1998 index exceeded the October 1987 index by 24.5. The Internal Revenue Service has, therefore, determined that the automobile price inflation adjustment for 1999 is 21.27 percent

1999–5 I.R.B 57 February 1, 1999

(2) Amount of the Limitation. For automobiles (other than electric automobiles) placed in service in calendar year 1999, Table 1 contains the dollar amount of the depreciation limitations for each tax year. For electric automobiles placed in service in calendar year 1999, Table 2 contains these amounts.

(24.5/115.2 � 100%). This adjustment is applicable to all automobiles that are first placed in service in calendar year 1999. The dollar limitations in § 280F(a) must therefore be multiplied by a factor of 0.2127, 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 electric automo

biles) for 1999. To determine the dollar limitations applicable to an electric automobile first placed in service during calendar year 1999, the dollar limitations in § 280F(a) are tripled in accordance with § 280F(a)(1)(C) and are then multiplied by a factor of 0.2127; the resulting increases, after rounding to the nearest $100, are added to the tripled 1988 limitations to give the depreciation limitations for 1999.

REV. PROC. 99–14 TABLE 1

DEPRECIATION LIMITATIONS FOR AUTOMOBILES

(OTHER THAN ELECTRIC AUTOMOBILES) FIRST PLACED IN SERVICE IN CALENDAR YEAR 1999

Tax Year Amount

1st Tax Year $3,060 2nd Tax Year $5,000 3rd Tax Year $2,950 Each Succeeding Year $1,775

REV. PROC. 99–14 TABLE 2

DEPRECIATION LIMITATIONS FOR ELECTRIC AUTOMOBILES

FIRST PLACED IN SERVICE IN CALENDAR YEAR 1999

Tax Year Amount

1st Tax Year $9,280 2nd Tax Year $14,900 3rd Tax Year $8,950 Each Succeeding Year $5,325

3. Inclusions in Income of Lessees of Automobiles.

The inclusion amounts for automobiles first leased in calendar year 1999 are cal

culated under the procedures described in § 1.280F–7(a). Lessees of automobiles other than electric automobiles should use Table 3 in applying these procedures, while lessees of electric automobiles should use Table 4.

DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN ELECTRIC AUTOMOBILES)

WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 1999

Fair Market Value Tax Year During Lease of Automobile Over Not Over 1st 2nd 3rd 4th 5th and Later

$ 15,500 15,800 2 3 4 4 6 15,800 16,100 4 7 10 13 14 16,100 16,400 6 11 17 20 23 16,400 16,700 8 15 23 28 32 16,700 17,000 10 20 29 35 41 17,000 17,500 13 25 38 45 53

February 1, 1999 58 1999–5 I.R.B.

REV. PROC. 99–14 TABLE 3

DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN ELECTRIC AUTOMOBILES)

WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 1999

Fair Market Value Tax Year During Lease of Automobile Over Not Over 1st 2nd 3rd 4th 5th and Later

17,500 18,000 16 32 48 58 68 18,000 18,500 19 39 59 71 82 18,500 19,000 22 47 69 83 96 19,000 19,500 26 53 80 96 111 19,500 20,000 29 61 90 108 126 20,000 20,500 32 68 101 121 140 20,500 21,000 35 75 111 134 155 21,000 21,500 39 82 122 146 169 21,500 22,000 42 89 132 160 183 22,000 23,000 47 100 148 178 206 23,000 24,000 53 114 169 204 235 24,000 25,000 60 128 190 229 264 25,000 26,000 66 142 212 254 293 26,000 27,000 73 156 233 279 322 27,000 28,000 79 171 253 305 351 28,000 29,000 85 185 275 330 380 29,000 30,000 92 199 296 355 410 30,000 31,000 98 214 316 381 439 31,000 32,000 105 227 338 406 468 32,000 33,000 111 242 359 431 497 33,000 34,000 118 256 380 456 527 34,000 35,000 124 270 402 481 556 35,000 36,000 131 284 423 506 585 36,000 37,000 137 299 443 532 614 37,000 38,000 144 313 464 557 643 38,000 39,000 150 327 486 582 672 39,000 40,000 157 341 507 607 702 40,000 41,000 163 355 528 633 731 41,000 42,000 170 369 549 658 760 42,000 43,000 176 384 570 683 789 43,000 44,000 183 398 591 708 819 44,000 45,000 189 412 612 734 848 45,000 46,000 196 426 633 759 877 46,000 47,000 202 441 654 784 906 47,000 48,000 208 455 675 810 935 48,000 49,000 215 469 696 835 964 49,000 50,000 221 483 718 860 993 50,000 51,000 228 497 739 885 1,023 51,000 52,000 234 512 759 911 1,052 52,000 53,000 241 526 780 936 1,081 53,000 54,000 247 540 802 961 1,110 54,000 55,000 254 554 823 986 1,140 55,000 56,000 260 569 843 1,012 1,169 56,000 57,000 267 582 865 1,037 1,198 57,000 58,000 273 597 886 1,062 1,227 58,000 59,000 280 611 907 1,087 1,256 59,000 60,000 286 625 928 1,113 1,285 60,000 62,000 296 646 960 1,151 1,329 62,000 64,000 309 675 1,002 1,201 1,387

1999–5 I.R.B 59 February 1, 1999

REV. PROC. 99–14 TABLE 3

DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN ELECTRIC AUTOMOBILES)

WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 1999

Fair Market Value Tax Year During Lease of Automobile Over Not Over 1st 2nd 3rd 4th 5th and Later

64,000 66,000 322 703 1,044 1,252 1,446 66,000 68,000 335 732 1,086 1,302 1,504 68,000 70,000 348 760 1,128 1,353 1,563 70,000 72,000 361 788 1,171 1,403 1,621 72,000 74,000 374 817 1,212 1,454 1,679 74,000 76,000 387 845 1,255 1,504 1,738 76,000 78,000 399 874 1,297 1,555 1,796 78,000 80,000 412 902 1,339 1,606 1,854 80,000 85,000 435 952 1,413 1,694 1,956 85,000 90,000 467 1,023 1,518 1,821 2,102 90,000 95,000 500 1,094 1,623 1,947 2,248 95,000 100,000 532 1,165 1,729 2,073 2,394 100,000 110,000 581 1,271 1,887 2,263 2,612 110,000 120,000 645 1,414 2,097 2,516 2,904 120,000 130,000 710 1,556 2,308 2,768 3,196 130,000 140,000 775 1,697 2,519 3,021 3,488 140,000 150,000 840 1,839 2,730 3,274 3,779 150,000 160,000 904 1,982 2,940 3,526 4,072 160,000 170,000 969 2,124 3,151 3,779 4,363 170,000 180,000 1,034 2,265 3,362 4,032 4,655 180,000 190,000 1,099 2,407 3,573 4,284 4,947 190,000 200,000 1,163 2,550 3,783 4,537 5,238 200,000 210,000 1,228 2,692 3,994 4,789 5,530 210,000 220,000 1,293 2,833 4,205 5,043 5,822 220,000 230,000 1,358 2,975 4,416 5,295 6,114 230,000 240,000 1,422 3,118 4,626 5,548 6,405 240,000 250,000 1,487 3,260 4,837 5,800 6,697

February 1, 1999 60 1999–5 I.R.B.

REV. PROC. 99–14 TABLE 4

DOLLAR AMOUNTS FOR ELECTRIC AUTOMOBILES WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 1999

Fair Market Value Tax Year During Lease of Automobile Over Not Over 1st 2nd 3rd 4th 5th and Later

$ 47,000 48,000 7 14 21 26 30 48,000 49,000 14 28 42 51 59 49,000 50,000 20 43 62 77 88 50,000 51,000 27 57 83 102 118 51,000 52,000 33 71 105 127 147 52,000 53,000 39 86 126 151 177 53,000 54,000 46 100 147 177 205 54,000 55,000 52 114 168 202 235 55,000 56,000 59 128 189 228 264 56,000 57,000 65 142 211 253 292 57,000 58,000 72 156 232 278 322 58,000 59,000 78 171 252 304 351 59,000 60,000 85 185 273 329 380 60,000 62,000 95 206 305 367 424 62,000 64,000 107 235 347 417 483 64,000 66,000 120 263 389 468 541 66,000 68,000 133 291 432 518 600 68,000 70,000 146 320 473 569 658 70,000 72,000 159 348 516 619 716 72,000 74,000 172 377 558 669 775 74,000 76,000 185 405 600 720 833 76,000 78,000 198 433 643 771 891 78,000 80,000 211 462 684 822 949 80,000 85,000 234 511 758 910 1,052 85,000 90,000 266 582 864 1,036 1,198 90,000 95,000 298 654 968 1,163 1,343 95,000 100,000 331 724 1,075 1,289 1,489 100,000 110,000 379 831 1,232 1,479 1,708 110,000 120,000 444 973 1,443 1,731 2,000 120,000 130,000 509 1,115 1,654 1,984 2,291 130,000 140,000 574 1,257 1,864 2,237 2,583 140,000 150,000 638 1,399 2,075 2,490 2,875 150,000 160,000 703 1,541 2,286 2,742 3,167 160,000 170,000 768 1,683 2,497 2,994 3,459 170,000 180,000 833 1,825 2,707 3,248 3,750 180,000 190,000 897 1,967 2,918 3,500 4,042 190,000 200,000 962 2,109 3,129 3,753 4,333 200,000 210,000 1,027 2,251 3,340 4,005 4,625 210,000 220,000 1,092 2,393 3,550 4,258 4,917 220,000 230,000 1,156 2,535 3,761 4,511 5,209 230,000 240,000 1,221 2,677 3,972 4,763 5,501 240,000 250,000 1,286 2,819 4,183 5,016 5,792

1999–5 I.R.B 61 February 1, 1999

4. 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 139.7 for October 1998. The October 1998 index exceeded the October 1987 index by 24.5. The Internal Revenue Service has, therefore, determined that the adjustment for 1999 is 21.27 percent (24.5/115.2 � 100%). This adjustment is applicable to all employer-provided auto

mobiles first made available to any employee for personal use in calendar year 1999. The maximum fair market value specified in § 1.61–21(e)(1)(iii)(A) must therefore be multiplied by a factor of 0.2127, and the resulting increase, after rounding to the nearest $100, is added to $12,800 to give the maximum value for 1999. (2) The Maximum Automobile Value. For automobiles first made available in calendar year 1999 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 $15,500.