2018-Luxury Automobile Depreciation Limits
Answer:
Section 280F limits the ยง179 expensing and depreciation deductions (including bonus depreciation) with respect to certain passenger automobiles.
For passenger automobiles placed into service after December 31, 2017 the maximum amount of allowable depreciation is increased to $10,000 for the first year;
$16,000 for the second year; $9,600 for the third year; and $5,760 for the fourth and later years. Each of these amounts will be indexed for inflation in years after 2018.
The maximum first-year bonus depreciation (which was scheduled to reduce to $6,400 in 2018 and $4,800 in 2019) will remain at $8,000.
For property placed into service after December 31, 2017, qualified leasehold improvement, qualified restaurant and qualified retail improvement property will be subject to a 15-year recovery period and straight-line depreciation.
For passenger automobiles placed into service after December 31, 2017 the maximum amount of allowable depreciation is increased to $10,000 for the first year;
$16,000 for the second year; $9,600 for the third year; and $5,760 for the fourth and later years. Each of these amounts will be indexed for inflation in years after 2018.
The maximum first-year bonus depreciation (which was scheduled to reduce to $6,400 in 2018 and $4,800 in 2019) will remain at $8,000.
For property placed into service after December 31, 2017, qualified leasehold improvement, qualified restaurant and qualified retail improvement property will be subject to a 15-year recovery period and straight-line depreciation.
