SECTION 4. APPLICATION

1. A taxpayer placing an automobile in service for the first time during calendar year 2002 is limited to the depreciation deduction shown in Table 1 of section 4.02(2) of this revenue procedure or, in the case of an electric automobile, Table 2 of this revenue procedure. A taxpayer first leasing an automobile in calendar year 2002 must determine the inclusion amount that is added to gross income using Table 3 of section 4.03 of this revenue procedure or, in the case of an electric automobile, Table 4 of this revenue procedure. In addition, the procedures of § 1.280F–7(a) must be followed. An employer providing an automobile for the first time in calendar year 2002 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) of this revenue procedure. If the fair market 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 Deductions 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 automo

2002–5 I.R.B. 451 February 4, 2002

REV. PROC. 2002–14 TABLE 1 DEPRECIATION LIMITATIONS FOR AUTOMOBILES

(OTHER THAN ELECTRIC AUTOMOBILES) FIRST PLACED IN SERVICE IN CALENDAR YEAR 2002

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. 2002–14 TABLE 2 DEPRECIATION LIMITATIONS FOR ELECTRIC AUTOMOBILES

FIRST PLACED IN SERVICE IN CALENDAR YEAR 2002

Tax Year Amount

1st Tax Year $ 9,180

2nd Tax Year $14,700

3rd Tax Year $ 8,750

Each Succeeding Year $ 5,325

3. Inclusions in Income of Lessees of Automobiles . The inclusion amounts for automobiles first leased in calendar year 2002 are calculated 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 applying these procedures, while lessees of electric automobiles should use Table 4 of this revenue procedure.

REV. PROC. 2002–14 TABLE 3

DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN

ELECTRIC AUTOMOBILES) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2002

Fair Market Value

of Automobile

Over Not Over

Tax Year During Lease

1st 2nd 3rd 4th 5th and Later

$15,500 15,800 2 3 5 6 6 15,800 16,100 3 7 9 11 13 16,100 16,400 4 10 14 17 19 16,400 16,700 6 13 18 22 26 16,700 17,000 7 16 23 28 31

17,000 17,500 9 20 29 35 40 17,500 18,000 11 25 37 44 50 18,000 18,500 14 30 44 53 61

18,500 19,000 16 35 52 62 72 19,000 19,500 18 40 60 71 82

February 4, 2002 452 2002–5 I.R.B.

REV. PROC. 2002–14 TABLE 3—CONTINUED DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN

ELECTRIC AUTOMOBILES) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2002 Fair Market Value Tax Year During

of Automobile

Tax Year During Lease

Over Not Over

1st 2nd 3rd 4th 5th and Later

19,500 20,000 21 45 67 80 93 20,000 20,500 23 50 75 89 103 20,500 21,000 25 56 82 98 114 21,000 21,500 28 60 90 108 123 21,500 22,000 30 66 97 117 134 22,000 23,000 33 74 108 130 150 23,000 24,000 38 84 123 149 171

24,000 25,000 43 94 139 166 192

25,000 26,000 47 104 154 185 213

26,000 27,000 52 114 169 203 234

27,000 28,000 57 124 185 220 255

28,000 29,000 61 135 199 239 276

29,000 30,000 66 145 214 258 296

30,000 31,000 71 155 230 275 318

31,000 32,000 75 165 245 294 338

32,000 33,000 80 175 260 312 360

33,000 34,000 85 185 276 329 381

34,000 35,000 89 196 290 348 402

35,000 36,000 94 206 305 367 422

36,000 37,000 99 216 321 384 443

37,000 38,000 103 226 336 403 464

38,000 39,000 108 236 351 421 485

39,000 40,000 112 247 366 439 506

40,000 41,000 117 257 381 457 527 41,000 42,000 122 267 396 475 549 42,000 43,000 126 278 411 493 570 43,000 44,000 131 288 426 512 590 44,000 45,000 136 298 441 530 611

45,000 46,000 140 308 457 548 632 46,000 47,000 145 318 472 566 653 47,000 48,000 150 328 487 584 674

48,000 49,000 154 339 502 602 695 49,000 50,000 159 349 517 620 717 50,000 51,000 164 359 532 639 737 51,000 52,000 168 369 548 657 758 52,000 53,000 173 379 563 675 779

53,000 54,000 177 390 578 693 800 54,000 55,000 182 400 593 711 821

2002–5 I.R.B. 453 February 4, 2002

REV. PROC. 2002–14 TABLE 3—CONTINUED DOLLAR AMOUNTS FOR AUTOMOBILES (OTHER THAN

ELECTRIC AUTOMOBILES) WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2002 Fair Market Value Tax Year During

of Automobile

Tax Year During Lease

Over Not Over

1st 2nd 3rd 4th 5th and Later

55,000 56,000 187 410 608 729 842 56,000 57,000 191 420 624 747 863 57,000 58,000 196 430 639 766 883 58,000 59,000 201 440 654 784 905 59,000 60,000 205 451 669 802 925 60,000 62,000 212 466 692 829 957 62,000 64,000 222 486 722 866 999

64,000 66,000 231 507 752 902 1,041

66,000 68,000 240 527 783 938 1,083

68,000 70,000 250 547 813 974 1,125

70,000 72,000 259 568 843 1,011 1,166

72,000 74,000 268 589 873 1,047 1,208

74,000 76,000 277 609 904 1,083 1,250

76,000 78,000 287 629 934 1,120 1,292

78,000 80,000 296 650 964 1,156 1,334

80,000 85,000 312 686 1,017 1,219 1,408

85,000 90,000 335 737 1,092 1,311 1,512

90,000 95,000 359 787 1,169 1,401 1,617

95,000 100,000 382 838 1,245 1,491 1,722

100,000 110,000 417 915 1,358 1,627 1,880

110,000 120,000 463 1,017 1,509 1,810 2,089

120,000 130,000 510 1,119 1,660 1,991 2,299

130,000 140,000 556 1,221 1,812 2,172 2,509

140,000 150,000 603 1,323 1,963 2,354 2,718 150,000 160,000 649 1,425 2,115 2,535 2,928 160,000 170,000 696 1,527 2,266 2,717 3,137 170,000 180,000 742 1,629 2,418 2,898 3,347 180,000 190,000 789 1,731 2,569 3,080 3,556

190,000 200,000 835 1,833 2,720 3,262 3,766 200,000 210,000 881 1,935 2,872 3,443 3,976 210,000 220,000 928 2,037 3,023 3,625 4,185

220,000 230,000 974 2,139 3,175 3,806 4,395 230,000 240,000 1,021 2,241 3,326 3,988 4,604 240,000 250,000 1,067 2,343 3,478 4,169 4,814

February 4, 2002 454 2002–5 I.R.B.

REV. PROC. 2002–14 TABLE 4 DOLLAR AMOUNTS FOR ELECTRIC AUTOMOBILES WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2002 Fair Market Value Tax Year During

of Automobile

Tax Year During Lease

Over Not Over

1st 2nd 3rd 4th 5th and Later

$46,000 47,000 3 6 10 11 12 47,000 48,000 7 16 26 29 33 48,000 49,000 12 26 41 47 54 49,000 50,000 17 36 56 66 74 50,000 51,000 21 47 71 83 96 51,000 52,000 26 57 86 102 117 52,000 53,000 31 67 101 120 138

53,000 54,000 35 77 117 138 159

54,000 55,000 40 87 132 156 180

55,000 56,000 45 98 146 174 201

56,000 57,000 49 108 161 193 222

57,000 58,000 54 118 177 211 242

58,000 59,000 59 128 192 229 264

59,000 60,000 63 139 206 248 284

60,000 62,000 70 154 229 275 316

62,000 64,000 79 174 260 311 358

64,000 66,000 89 195 290 347 400

66,000 68,000 98 215 320 384 442

68,000 70,000 107 236 350 420 484

70,000 72,000 117 256 381 456 525

72,000 74,000 126 276 411 493 567

74,000 76,000 135 297 441 529 609

76,000 78,000 145 317 472 564 652 78,000 80,000 154 337 502 602 693

80,000 85,000 170 373 555 665 767 85,000 90,000 193 424 631 756 871 90,000 95,000 217 475 706 847 976

95,000 100,000 240 526 782 937 1,081 100,000 110,000 275 602 896 1,073 1,239 110,000 120,000 321 705 1,047 1,255 1,448 120,000 130,000 368 806 1,199 1,436 1,658 130,000 140,000 414 909 1,350 1,617 1,868

140,000 150,000 460 1,011 1,501 1,800 2,076 150,000 160,000 507 1,113 1,652 1,981 2,287 160,000 170,000 553 1,215 1,804 2,163 2,496

170,000 180,000 600 1,317 1,955 2,344 2,706 180,000 190,000 646 1,419 2,107 2,525 2,916

2002–5 I.R.B. 455 February 4, 2002

REV. PROC. 2002–14 TABLE 4—CONTINUED DOLLAR AMOUNTS FOR ELECTRIC AUTOMOBILES WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2002 Fair Market Value Tax Year During

of Automobile

Tax Year During Lease

Over Not Over

1st 2nd 3rd 4th 5th and Later

190,000 200,000 693 1,521 2,258 2,707 3,125 200,000 210,000 739 1,623 2,410 2,888 3,335 210,000 220,000 786 1,725 2,561 3,070 3,544 220,000 230,000 832 1,827 2,712 3,252 3,754 230,000 240,000 879 1,929 2,863 3,434 3,963 240,000 250,000 925 2,031 3,015 3,615 4,173

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 employerprovided 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 137.7 for October 2000. The October 2000 index exceeded the October 1987 index by 22.5. The Internal Revenue Service has, therefore, determined that the adjustment for 2002 is 19.53125 percent (22.5/115.2 x 100%). This adjustment is applicable to all

employer-provided automobiles first made available to any employee for personal use in calendar year 2002. The maximum fair market value specified in § 1.61–21(e)(1)(iii)(A) must therefore be multiplied by a factor of 0.1953125, and the resulting increase, after rounding to the nearest $100, is added to $12,800 to give the maximum value for calendar year 2002.

(2) The Maximum Automobile Value . For automobiles first made available in calendar year 2002 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 $15,300.