IRS Provides 2018 Luxury Auto Caps, Lease Inclusion Tables


The IRS has issued “luxury car” depreciation caps for passenger automobiles first placed in service during calendar year 2018. For purposes of this guidance, “passenger automobiles”includes trucks and vans.

  • For passenger automobiles placed in service in 2018 for which the additional first year depreciation deduction under Code Sec. 168(k) does not apply, the depreciation limitations for the first three years are $10,000, $16,000, and $9,600, respectively, and $5,760 for each succeeding year.
  • For passenger automobiles acquired before September 28, 2017, and placed in service in 2018, for which the additional first year depreciation deduction applies, the depreciation limitations for the first three years are $16,400, $16,000, and $9,600, respectively, and $5,760 for each succeeding year.
  • For passenger automobiles acquired after September 27, 2017, and placed in service in 2018, for which the additional first year depreciation deduction applies, the depreciation limitations for the first three years are $18,000, $16,000, and $9,600, respectively, and $5,760 for each succeeding year.

Lease inclusion tables for passenger automobiles first leased in 2018 have also been provided with the applicable inclusion amounts.