SECTION 4. APPLICATION

.01 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 C-CPI-U automobile component for October of the preceding

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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 deter

mined under § 1(f)(3)(B) (0.694370319) is 100.592. The new vehicle component of the C-CPI-U released in November 2019 was 101.332 for October 2019. The October 2019 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 0.74 (101.332 100.592). The percentage by which the C-CPI-U new vehicle component for October 2019 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 0.736 percent (0.74/100.592 x 100%), the automobile price inflation adjustment for 2020 for passenger automobiles. The dollar limitations in § 280F(a) are therefore multiplied by a factor of 0.00736, and the resulting increases, after round

ing to the nearest $100, are added to the 2018 limitations to give the depreciation limitations applicable to passenger automobiles for calendar year 2020. This adjustment applies to all passenger automobiles that are first placed in service in calendar year 2020.

(2) Amount of the limitation . Tables 1 and 2 contain the dollar amount of the depreciation limitation for each taxable year for passenger automobiles a taxpayer places in service during calendar year 2020. Use Table 1 for a passenger automobile to which the § 168(k) additional first year depreciation deduction applies that is acquired by the taxpayer after September 27, 2017, and placed in service by the taxpayer during calendar year 2020; and Table 2 for a passenger automobile for which no § 168(k) additional first year depreciation deduction applies.

REV. PROC. 2020-37 TABLE 1 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES ACQUIRED AFTER SEPTEMBER 27, 2017, AND PLACED IN SERVICE DURING CALENDAR YEAR 2020, FOR WHICH THE § 168(k) ADDITIONAL FIRST YEAR DE PRECIATION 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. 2020-37 TABLE 2 DEPRECIATION LIMITATIONS FOR PASSENGER AUTOMOBILES PLACED IN SERVICE DURING CALENDAR YEAR 2020 FOR WHICH NO § 168(k) ADDITIONAL FIRST YEAR DEPRE CIATION 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

.02 Inclusions in Income of Lessees of Passenger Automobiles .

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

come inclusion amounts for passenger automobiles first leased in calendar year 2020. In applying these procedures, les

sees of passenger automobiles should use Table 3 of this revenue procedure.

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REV. PROC. 2020-37 TABLE 3 DOLLAR AMOUNTS FOR PASSENGER AUTOMOBILES WITH A LEASE TERM BEGINNING IN CALENDAR YEAR 2020 Fair Market Value of Passenger

Automobile Tax Year During Lease Over Not Over 1 ^st 2 ^nd 3 ^rd 4 ^th 5 ^th & later $50,000 $51,000 0 1 0 2 2 51,000 52,000 2 6 9 10 13 52,000 53,000 5 11 17 20 24 53,000 54,000 7 17 24 30 35 54,000 55,000 10 22 32 39 46 55,000 56,000 12 27 41 48 57 56,000 57,000 15 32 49 58 68 57,000 58,000 17 38 56 68 79 58,000 59,000 19 44 64 77 90 59,000 60,000 22 49 72 87 100 60,000 62,000 26 56 84 102 117 62,000 64,000 30 68 99 121 139 64,000 66,000 35 78 116 139 161 66,000 68,000 40 89 131 159 183 68,000 70,000 45 99 148 177 205 70,000 72,000 50 110 163 197 227 72,000 74,000 55 121 179 215 249 74,000 76,000 60 131 195 235 271 76,000 78,000 64 142 211 254 293 78,000 80,000 69 153 227 272 315 80,000 85,000 78 172 254 306 353 85,000 90,000 90 198 295 353 408 90,000 95,000 102 225 334 401 463 95,000 100,000 114 252 373 449 518 100,000 110,000 133 292 433 520 600 110,000 120,000 157 345 513 615 710 120,000 130,000 181 399 592 710 820 130,000 140,000 206 452 671 805 931 140,000 150,000 230 506 750 901 1,040 150,000 160,000 254 559 830 996 1,150 160,000 170,000 279 612 909 1,091 1,260 170,000 180,000 303 666 988 1,186 1,370 180,000 190,000 327 720 1,067 1,281 1,480 190,000 200,000 351 773 1,147 1,377 1,589 200,000 210,000 376 826 1,227 1,471 1,700 210,000 220,000 400 880 1,306 1,566 1,810 220,000 230,000 424 934 1,385 1,661 1,920 230,000 240,000 449 987 1,464 1,757 2,029 240,000 and over 473 1,040 1,544 1,852 2,139

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