The Internal Revenue Service update of the depreciation limits for higher-priced passenger vehicles should have minimal impact on commercial leasing, fleet management company executives said.
"Revenue Procedure 2019-26" provides new tables of limitations on depreciations for owners of passenger vehicles placed in service in 2019 and a table of amounts that must be included in income by lessees of passenger vehicles first leased to the taxpayer in 2019. The tables cover light-duty cars, trucks, and vans.
The tables detail depreciation limits and lessee inclusion amounts to reflect automobile price inflation adjustments, according to the IRS. The update will appear in Internal Revenue Bulletin 2019-24, which will be released on June 10.
"There is little or no impact to leasing companies or our clients from this normal update for inflation," said Shlomo Crandus, CFO of Wheels, Inc. "Most clients utilize moderate cost vehicles and will not be affected; clients using higher cost vehicles will have a slightly lower tax deduction for their lease expense. This will not affect decisions on vehicle choices."
In the update, Table 4 shows the dollar amounts for affected vehicles that begin at $50,000 and cover $10,000 increments up to $240,000 and above.
"It looks like a fairly narrow impact in the commercial leasing environment," said Beth Kandrysawtz, CEO of Motorlease Corp. "Check with your CPA."