The IRS updated the fleet-average and vehicle cents-per-mile valuation rules described in Regs. Secs. 1.61-21(d) and (e), respectively, to align the limitations on the maximum vehicle fair market values (FMVs) for use of these special valuation rules with recent statutory changes made to the depreciation limitations in Sec. 280F (T.D. 9893). The regulations finalize, without substantive change, proposed regulations (REG-101378-19) issued in May 2019.
Consistent with the substantial increase in the dollar limitations on depreciation deductions under Sec. 280F(a), the regulations increase, effective for the 2018 calendar year, the maximum base FMV of a vehicle for use of the fleet-average or vehicle cents-per-mile valuation rule to $50,000. The regulations provide that this $50,000 base value will be adjusted annually for inflation, using the adjustment in Sec. 280F(d)(7), for 2019 and subsequent years. Notice 2020-05 provided that the inflation-adjusted amount for 2020 is $50,400, unchanged from 2019.
When an employer provides an employee with a vehicle that he or she can drive for personal use,...
Story courtesy of the Journal of Accountancy
By Sally P. Schreiber, J.D.
February 4, 2020
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