SECTION 3. SCOPE AND OBJECTIVE

1. The limitations on depreciation deductions in section 4.02 of this revenue procedure apply to automobiles (other than leased automobiles) that are placed in service in calendar year 2000 and continue to apply for each tax year that the automobile remains in service.

2. The tables in section 4.03 of this revenue procedure apply to leased automobiles for which the lease term begins in calendar year 2000. Lessees of such automobiles must use these tables to determine the inclusion amount for each tax year during which the automobile is leased.

3. See Rev. Proc. 96-25, 1996-1 C.B. 681, for information on determining in

February 28, 2000 722 2000–9 I.R.B.

value of the automobile exceeds the amount specified in section 4.04(2) of this revenue procedure, 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 138.8 for October 1999. The October 1999 index exceeded the October 1987 index by 23.6. The Internal Revenue Service has, therefore, determined that the automobile price inflation adjustment for 2000 is 20.49 percent (23.6/115.2 x 100%). This adjustment is applicable to all automobiles that are first placed in service in calendar year 2000. The dollar limitations in § 280F(a) must therefore be multiplied by a factor of 0.2049, 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 calendar year 2000. To determine the dollar limitations applicable to an electric automobile first placed in service during calendar year 2000, the dollar limitations in § 280F(a) are tripled in accordance with § 280F(a)(1)(C) and are then multiplied by a factor of 0.2049; the resulting increases, after rounding to the nearest $100, are added to the tripled 1988 limitations to give the depreciation limitations for calendar year 2000.

(2) Amount of the Limitation . For automobiles (other than electric automobiles) placed in service in calendar year 2000, Table 1 of this revenue procedure contains the dollar amount of the depreciation limitations for each tax year. For electric automobiles placed in service in calendar year 2000, Table 2 of this revenue procedure contains these amounts.

DEPRECIATION LIMITATIONS FOR AUTOMOBILES

(OTHER THAN ELECTRIC AUTOMOBILES) FIRST PLACED IN SERVICE IN CALENDAR YEAR 2000

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. 2000-18, TABLE 2

DEPRECIATION LIMITATIONS FOR ELECTRIC AUTOMOBILES

FIRST PLACED IN SERVICE IN CALENDAR YEAR 2000

Tax Year Amount

1st Tax Year $9,280 2nd Tax Year $14,800 3rd Tax Year $8,850 Each Succeeding Year $5,325

3. Inclusions in Income of Lessees of Automobiles .

The inclusion amounts for automobiles first leased in calendar year 2000 are cal

culated under the procedures described in § 1.280F-7(a). Lessees of automobiles other than electric automobiles should use Table 3 of this revenue procedure in ap

plying these procedures, while lessees of electric automobiles should use Table 4 of this revenue procedure.

2000–9 I.R.B. 723 February 28, 2000

$ 15,500 15,800 3 6 9 10 12 15,800 16,100 5 12 17 20 23 16,100 16,400 8 17 25 30 34 16,400 16,700 10 23 33 40 45 16,700 17,000 13 28 42 49 57 17,000 17,500 16 36 52 62 72 17,500 18,000 20 45 66 78 91 18,000 18,500 25 54 79 95 109 18,500 19,000 29 63 93 111 128 19,000 19,500 33 72 107 127 147 19,500 20,000 37 81 121 143 166 20,000 20,500 41 91 133 160 185 20,500 21,000 45 100 147 176 204 21,000 21,500 50 109 160 193 222 21,500 22,000 54 118 174 209 241 22,000 23,000 60 132 194 234 269 23,000 24,000 68 150 222 266 306 24,000 25,000 77 168 249 298 345 25,000 26,000 85 187 276 331 381 26,000 27,000 93 205 303 364 419 27,000 28,000 102 223 330 396 457 28,000 29,000 110 241 358 429 494 29,000 30,000 119 259 385 461 532 30,000 31,000 127 278 412 493 570 31,000 32,000 135 296 439 527 607 32,000 33,000 144 314 467 558 645 33,000 34,000 152 333 493 591 683 34,000 35,000 160 351 521 623 720 35,000 36,000 169 369 548 656 757 36,000 37,000 177 388 574 689 795 37,000 38,000 185 406 602 721 833 38,000 39,000 194 424 629 754 870 39,000 40,000 202 443 656 786 908 40,000 41,000 210 461 683 819 946 41,000 42,000 219 479 710 852 983 42,000 43,000 227 497 738 884 1,021 43,000 44,000 235 516 765 916 1,058 44,000 45,000 244 534 792 949 1,095 45,000 46,000 252 552 819 982 1,133 46,000 47,000 260 571 846 1,014 1,171 47,000 48,000 269 589 873 1,047 1,208 48,000 49,000 277 607 901 1,079 1,246 49,000 50,000 285 626 927 1,112 1,284 50,000 51,000 294 644 954 1,145 1,321 51,000 52,000 302 662 982 1,177 1,359 52,000 53,000 311 680 1,009 1,210 1,396 53,000 54,000 319 699 1,036 1,242 1,433

February 28, 2000 724 2000–9 I.R.B.

REV. PROC. 2000-18, TABLE 3 (Cont’d.)

DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN ELECTRIC AUTOMOBILES)

WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2000

Fair Market Value Tax Year During Lease of Automobile

1st 2nd 3rd 4th 5th and Over Not Over Later

54,000 55,000 327 717 1,063 1,275 1,471 55,000 56,000 336 735 1,090 1,308 1,508 56,000 57,000 344 754 1,117 1,340 1,546 57,000 58,000 352 772 1,145 1,372 1,584 58,000 59,000 361 790 1,172 1,405 1,621 59,000 60,000 369 808 1,199 1,438 1,659 60,000 62,000 381 836 1,240 1,486 1,715 62,000 64,000 398 873 1,294 1,551 1,790 64,000 66,000 415 909 1,348 1,617 1,865 66,000 68,000 432 945 1,403 1,681 1,941 68,000 70,000 448 982 1,457 1,747 2,016 70,000 72,000 465 1,019 1,511 1,811 2,092 72,000 74,000 482 1,055 1,566 1,876 2,166 74,000 76,000 498 1,092 1,620 1,942 2,241 76,000 78,000 515 1,129 1,673 2,007 2,317 78,000 80,000 532 1,165 1,728 2,072 2,392 80,000 85,000 561 1,229 1,823 2,186 2,523 85,000 90,000 603 1,320 1,959 2,349 2,711 90,000 95,000 644 1,412 2,095 2,511 2,899 95,000 100,000 686 1,504 2,230 2,674 3,087 100,000 110,000 749 1,641 2,433 2,918 3,369 110,000 120,000 832 1,824 2,705 3,243 3,745 120,000 130,000 916 2,006 2,977 3,569 4,120 130,000 140,000 999 2,190 3,248 3,894 4,496 140,000 150,000 1,083 2,372 3,520 4,219 4,872 150,000 160,000 1,166 2,556 3,790 4,545 5,248 160,000 170,000 1,250 2,738 4,062 4,871 5,623 170,000 180,000 1,333 2,921 4,334 5,196 5,998 180,000 190,000 1,416 3,105 4,605 5,521 6,374 190,000 200,000 1,500 3,287 4,877 5,846 6,750 200,000 210,000 1,583 3,470 5,148 6,172 7,126 210,000 220,000 1,667 3,653 5,419 6,498 7,501 220,000 230,000 1,750 3,836 5,691 6,823 7,877 230,000 240,000 1,834 4,019 5,962 7,148 8,253 240,000 250,000 1,917 4,202 6,233 7,474 8,629

2000–9 I.R.B. 725 February 28, 2000

REV. PROC. 2000-18, TABLE 4

DOLLAR AMOUNTS FOR ELECTRIC AUTOMOBILES WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2000

Fair Market Value Tax Year During Lease of Automobile

1st 2nd 3rd 4th 5th and Over Not Over Later

$ 47,000 48,000 7 17 26 32 36 48,000 49,000 14 31 47 57 66 49,000 50,000 20 45 69 82 95 50,000 51,000 27 59 90 107 124 51,000 52,000 33 74 110 133 153 52,000 53,000 39 88 132 157 183 53,000 54,000 46 102 153 183 211 54,000 55,000 52 116 174 209 240 55,000 56,000 59 130 195 234 270 56,000 57,000 65 145 216 259 299 57,000 58,000 72 159 237 284 328 58,000 59,000 78 173 258 310 357 59,000 60,000 85 187 279 335 387 60,000 62,000 95 208 311 373 430 62,000 64,000 107 237 353 423 489 64,000 66,000 120 266 394 474 547 66,000 68,000 133 294 437 524 606 68,000 70,000 146 322 480 574 664 70,000 72,000 159 351 521 625 723 72,000 74,000 172 379 564 675 781 74,000 76,000 185 407 606 727 838 76,000 78,000 198 436 648 777 897 78,000 80,000 211 464 690 828 955 80,000 85,000 234 514 763 916 1,058 85,000 90,000 266 585 869 1,042 1,204 90,000 95,000 298 656 975 1,168 1,350 95,000 100,000 331 727 1,080 1,295 1,495 100,000 110,000 379 834 1,237 1,485 1,714 110,000 120,000 444 975 1,449 1,737 2,006 120,000 130,000 509 1,117 1,660 1,990 2,297 130,000 140,000 574 1,259 1,870 2,243 2,589 140,000 150,000 638 1,402 2,080 2,496 2,881 150,000 160,000 703 1,543 2,292 2,748 3,173 160,000 170,000 768 1,685 2,503 3,000 3,465 170,000 180,000 833 1,827 2,713 3,254 3,756 180,000 190,000 897 1,970 2,923 3,506 4,049 190,000 200,000 962 2,112 3,134 3,759 4,340 200,000 210,000 1,027 2,253 3,346 4,011 4,632 210,000 220,000 1,092 2,395 3,556 4,264 4,924 220,000 230,000 1,156 2,538 3,766 4,517 5,215 230,000 240,000 1,221 2,680 3,977 4,769 5,507 240,000 250,000 1,286 2,821 4,189 5,022 5,798

February 28, 2000 726 2000–9 I.R.B.

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) of this revenue procedure. The new car component of the CPI was 115.2 for October 1987 and 138.8 for October 1999. The October 1999 index exceeded the October 1987 index by 23.6. The Internal Revenue Service has, therefore, determined that the adjustment for 2000 is 20.49 percent (23.6/115.2 x 100%). This adjustment is applicable to all employer-provided automobiles first made available to any employee for personal use in calendar year 2000. The maximum fair market value specified in § 1.6121(e)(1)(iii)(A) must therefore be multiplied by a factor of 0.2049, and the resulting increase, after rounding to the nearest $100, is added to $12,800 to give the maximum value for calendar year 2000.

(2) The Maximum Automobile Value . For automobiles first made available in calendar year 2000 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 $15,400.