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under § 168(k)(1)(A) of the Internal Revenue Code or the 100 percent additional first

year depreciation deduction under § 168(k)(5) applies. The tables detailing these

depreciation limitations and lessee inclusion amounts reflect the automobile price

inflation adjustments required by § 280F(d)(7).

SECTION 2. BACKGROUND

.01 For owners of passenger automobiles, § 280F(a) imposes dollar limitations on

the depreciation deduction for the year the taxpayer places the passenger automobile in

service and for each succeeding year. For passenger automobiles placed in service

after 1988, § 280F(d)(7) requires the Internal Revenue Service to increase the amounts

allowable as depreciation deductions by a price inflation adjustment amount. The

method of calculating this price inflation amount for trucks and vans placed in service in

or after calendar year 2003 uses a different CPI “automobile component” (the “new

trucks” component) than that used in the price inflation amount calculation for other

passenger automobiles (the “new cars” component), resulting in somewhat higher

depreciation deductions for trucks and vans. This change reflects the higher rate of

price inflation for trucks and vans since 1988.

.02 Section 2022(a) of the Small Business Jobs Act of 2010, Pub. L. No. 111-240,

124 Stat. 2504 (September 27, 2010), extended the 50 percent additional first year

depreciation deduction under § 168(k) to qualified property (as defined in § 168(k)(2))

acquired by the taxpayer after December 31, 2007, and before January 1, 2011, if no

written binding contract for the acquisition of the property existed before January 1,

2008, and if the taxpayer places the property in service generally before January 1,

2011. Section 401(a) of the Tax Relief, Unemployment Insurance Reauthorization, and

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