Rev. Proc. 83-74

SECTION 1. PURPOSE

This revenue procedure modifies Rev. Proc. 82-61, 1982-2 C.B. 849, by increasing the optional standard mileage rate for the business use of an automobile, and also by specifying the amount of depreciation per mile that is considered to be allowed with respect to an automobile in which the optional method is used in 1983.

SEC. 2. PROCEDURE

.01. Paragraph (1)(a) of subsection .01 of section 3 of Rev. Proc. 82-61 is amended to read as follows:

Subject to the conditions and limitations set forth in section 3.01(2) below, with respect to transportation expenses paid or incurred after December 31, 1982, deductions will be accepted if computed at a standard mileage rate of (a) 20.5 cents per mile for the first 15,000 miles of use each year for business purposes, and (b) 11 cents per mile for use for business purposes in excess of 15,000 miles per year.

.02. Paragraph (2)(a) of subsection .01 of section 3 of Rev. Proc. 82-61 is amended to read as follows:

In the case of automobiles placed in service for business purposes after December 31, 1979, and in which the optional method was used in 1980, 1981, 1982, or 1983, depreciation will be considered to have been allowed at the rate of 7 cents per mile for 1980 and 1981, 7.5 cents per mile in 1982, and 8 cents per mile in 1983, except that if the "actual cost" method was used for one or more of those years the rates above will not apply to any year in which that method was used. This depreciation will act to reduce the basis of the automobile in determining adjusted basis as required by section 1016 of the Code. An automobile placed in service after December 31, 1979, with respect to which the optional method is used is considered to have a useful life of 60,000 miles of business use at the maximum standard mileage rate determined without reference to the age of the vehicle. After 60,000 miles of business use at the maximum standard mileage rate, the automobile will be considered fully depreciated. For purpose of this paragraph, an automobile will be considered to have been driven no more than 15,000 miles in any-one year, even though the actual business mileage of the automobile may be greater.

SEC. 3. EFFECTIVE DATE

The amendments made by this revenue procedure are effective with respect to transportation expenses paid or incurred after December 31, 1982.

SEC. 4. EFFECT ON OTHER REVENUE PROCEDURES

Rev. Proc. 82-61 is modified.