The Internal Revenue Service (IRS) has issued Revenue Procedure 2001-19, which provides limitations on depreciation deductions for passenger automobiles first placed in service in calendar year 2001. The limitations are unchanged from 2000. For vehicles first put into service in 2001, full depreciation is limited to vehicles with a fair market value not exceeding $15,400. For owned vehicles, Revenue Procedure 2001-19 imposes dollar limitations on the depreciation deduction for the year the vehicle is first put into service and each succeeding year. These limitations are $3,060 in the first tax year, $4,900 in the second tax year, $2,950 in the third tax year, and $1,775 in each succeeding year. For leased vehicles, the revenue procedure requires the lessee to include in gross income an inclusion amount equivalent to the depreciation limits imposed on owners. The IRS document includes a table of the required inclusion amounts. The revenue procedure provides that the cents-per-mile valuation rule may be used if the the fair market value of the automobile on the date it is first made available does not exceed $15,400. This applies for automobiles first made available to an employee for personal use in 2001. The revenue procedure also sets the fair market value at $20,500 for vehicles that can be included when using the fleet-average rule for calculating the annual lease value of vehicles in the fleet. The text of Revenue Procedure 2001-19 is available through the FleetFocus page of NAFA’s Web site: www.nafa.org.