SECTION 4. APPLICATION

.01 Limitations on Depreciation De- ductions for Certain Automobiles .

(1) Amount of the inflation adjustment . Under § 280F(d)(7)(B)(i), the automobile price inflation adjustment for any calendar year is the percentage (if any) by which the C-CPI-U automobile component for October of the preceding calendar year exceeds the automobile component of the CPI (as defined in § 1(f)(4)) for October of 2017, multiplied by the amount determined under § 1(f)(3)(B). The amount determined under § 1(f)(3)(B) is the amount obtained by dividing the new vehicle component of the C-CPI-U for calendar year 2016 by the new vehicle component of the CPI for calendar year 2016, where the C-CPI-U and the CPI for calendar year 2016 means the average of such amounts as of the close of the 12-month period ending on August 31, 2016. Section 280F(d)(7)(B)(ii) defines the term “C-CPI-U automobile component” as the automobile component of the Chained Consumer Price Index for All Urban Consumers as described in § 1(f) (6). The product of the October 2017 CPI new vehicle component (144.868) and

the amount determined under § 1(f)(3)(B) (0.694370319) is 100.592. The new vehicle component of the C-CPI-U released in November 2018 was 101.318 for October 2018. The October 2018 C-CPI-U new vehicle component exceeded the product of the October 2017 CPI new vehicle component and the amount determined under § 1(f)(3)(B) by 0.726 (101.318 - 100.592). The percentage by which the C-CPI-U new vehicle component for October 2018 exceeds the product of the new vehicle component of the CPI for October of 2017 and the amount determined under § 1(f) (3)(B) is 0.722 percent (0.726/100.592 x 100%), the automobile price inflation adjustment for 2019 for passenger automobiles. The dollar limitations in § 280F(a) are therefore multiplied by a factor of 0.00722, and the resulting increases, after rounding to the nearest $100, are added to the 2018 limitations to give the depreciation limitations applicable to passenger automobiles for calendar year 2019. This adjustment applies to all passenger automobiles that are first placed in service in calendar year 2019.

(2) Amount of the limitation . Tables 1 through 3 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service during calendar year 2019. Use Table 1 for a passenger automobile to which the § 168(k) additional first year depreciation deduction applies that is acquired before September 28, 2017, and placed in service during calendar year 2019; Table 2 for a passenger automobile to which the § 168(k) additional first year depreciation deduction applies that is acquired after September 27, 2017, and placed in service during calendar year 2019; and Table 3 for a passenger automobile for which no § 168(k) additional first year depreciation deduction applies.

REV. PROC. 2019-26 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES ACQUIRED BEFORE SEPTEMBER 28, 2017, AND PLACED IN SERVICE DURING CALENDAR YEAR 2019 FOR

WHICH THE § 168(k) ADDITIONAL FIRST YEAR DEPRECIATION DEDUCTION APPLIES

Tax Year Amount 1st Tax Year $ 14,900 2nd Tax Year $ 16,100 3rd Tax Year $ 9,700 Each Succeeding Year $ 5,760

June 10, 2019 1324 Bulletin No. 2019–24

REV. PROC. 2019-26 TABLE 2 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES ACQUIRED AFTER SEPTEMBER 27, 2017, AND

PLACED IN SERVICE DURING CALENDAR YEAR 2019, FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR

DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $ 18,100 2nd Tax Year $ 16,100 3rd Tax Year $ 9,700 Each Succeeding Year $ 5,760

REV. PROC. 2019-26 TABLE 3 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES PLACED IN SERVICE DURING CALENDAR YEAR 2019 FOR WHICH NO § 168(k) ADDITIONAL FIRST YEAR

DEPRECIATION DEDUCTION APPLIES Tax Year Amount 1st Tax Year $ 10,100 2nd Tax Year $ 16,100 3rd Tax Year $ 9,700 Each Succeeding Year $ 5,760

should use Table 4 of this revenue procedure.

.02 Inclusions in Income of Lessees of Passenger Automobiles .

A taxpayer must follow the procedures in § 1.280F-7(a) for determining

the income inclusion amounts for passenger automobiles first leased in calendar year 2019. In applying these procedures, lessees of passenger automobiles

REV. PROC. 2019-26 TABLE 4 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2019 Fair Market Value of Passenger

Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & later $50,000 $51,000 0 1 1 3 3 51,000 52,000 4 11 15 20 23 52,000 53,000 9 20 30 36 43 53,000 54,000 13 30 44 53 63 54,000 55,000 17 40 58 70 83 55,000 56,000 22 49 72 88 102 56,000 57,000 26 59 86 105 122 57,000 58,000 31 68 101 122 142 58,000 59,000 35 78 115 139 161 59,000 60,000 39 88 129 156 181 60,000 62,000 46 102 151 181 211 62,000 64,000 55 121 179 216 250 64,000 66,000 63 140 208 251 289 66,000 68,000 72 160 236 284 329 68,000 70,000 81 179 265 318 369 70,000 72,000 90 198 293 353 408

Bulletin No. 2019–24 1325 June 10, 2019

REV. PROC. 2019-26 TABLE 4 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2019 Fair Market Value of Passenger

Automobile Tax Year During Lease Over Not Over 1st 2nd 3rd 4th 5th & later 72,000 74,000 98 217 322 387 448 74,000 76,000 107 236 351 421 487 76,000 78,000 116 255 379 456 526 78,000 80,000 125 275 407 489 567 80,000 85,000 140 308 458 549 635 85,000 90,000 162 356 529 635 734 90,000 95,000 184 404 600 720 833 95,000 100,000 206 452 671 806 931 100,000 110,000 238 525 778 934 1,079 110,000 120,000 282 621 920 1,105 1,277 120,000 130,000 326 717 1,063 1,276 1,474 130,000 140,000 370 812 1,206 1,447 1,672 140,000 150,000 413 909 1,348 1,618 1,869 150,000 160,000 457 1,005 1,491 1,788 2,067 160,000 170,000 501 1,101 1,633 1,960 2,264 170,000 180,000 545 1,197 1,776 2,130 2,461 180,000 190,000 588 1,293 1,919 2,301 2,659 190,000 200,000 632 1,389 2,061 2,473 2,856 200,000 210,000 676 1,485 2,204 2,643 3,053 210,000 220,000 720 1,581 2,346 2,815 3,250 220,000 230,000 763 1,677 2,489 2,986 3,448 230,000 240,000 807 1,773 2,632 3,156 3,645 240,000 and over 851 1,869 2,774 3,328 3,842