Rev. Proc. 2022-17 Question

Can someone please explain what is the "inclusion amount" in reference to revenue procedure 2022-17? In my situation, I leased a $40K SUV in Dec 2021 for 3 years at $550 per month. My 2022 lease expense was $6,600 and my business usage was 75%. Please let me know what I should include as the "inclusion amount"? I believe it should be $0. I would appreciate it if you please let me know the step by step for schedule 1065 K-1. Thanks!

790

Expert Alumni

Mar 8, 2023 5:36:18 AM

"The inclusion amount is calculated by finding the dollar amount on a price-based table provided by IRS Publication 463. This derived amount is prorated for the number of days of the lease term in the tax year."

In IRS Publication 463, scroll down to figuring the exclusion amount.

Inclusion Amount Definition

Level 2

Mar 9, 2023 8:36:44 PM

So if my FMV was only $40K, then there are no exclusion amounts for me as the table starts at $52K?

Expert Alumni

Mar 10, 2023 5:41:37 AM

Yes, you are correct that there is no inclusion amount for your vehicle based on the tables in IRS Publication 463 mentioned in the previous post.

@johnjames9

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Rev. Proc. 2022-17 Question

Inclusion Amount Definition