2021: Year 2 Bonus Depreciation/Section 179 on vehicle not calculating

[planetjr]

 I read the similarly named thread from 2/24/2020 that explained the situation 2 years ago. A great article was included that explained the 5 year ‘recovery period’ delayed wait before depreciation starts.

  My current situation for 2021 taxes: I bought a new Tacoma truck in 2020 for $37,933 and depreciated $18,100 in line 26i, Elected Sec 179 cost. The truck is used 100% for business, is under 6000 lbs, and TTax in 2020 included a form ‘Spec. Dep. Allowance Elections under IRC Section 168(k)(7)’ that states I elected out of Qualified Econ. Stimulus property for 5 year property asset classes.

  After editing my truck info under my Schedule F for 2021 taxes, TTax says it had enough info to figure my deductions and Federal depreciation, but listed only my actual expenses of gas, repairs etc. No depreciation at all, just a note saying ‘Year 2 of depreciation’.

  Is the only way I can depreciate any of my truck in 2021 is to amend my 2020 return, then refile and select I DON’T want to take the Sec 179? Otherwise do I have to wait 5 years before I can take any depreciation?

Thanks for your help,

Richard.

[DMarkM1]

Yes, to be eligible for the safe harbor depreciation as outlined in the "Great Article" you would need to amend your 2020 return and not take the 179 deduction.   Otherwise, as you mention, you wait the five years to start taking the remaining depreciation. 

[AmeliesUncle · Accepted solution]

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@planetjr wrote:

and TTax in 2020 included a form ‘Spec. Dep. Allowance Elections under IRC Section 168(k)(7)’ that states I elected out of Qualified Econ. Stimulus property for 5 year property asset classes.

Are you SURE that election was made?  If so, there would be no need to amend to remove Section 179.  The problem only occurs if you use 179 and DON'T make the election to opt-out of Bonus depreciation.

When you go back through the vehicle information, did you double-check that you said you did elected out of Bonus? 

It looks like you are using the Windows version of TurboTax.  Go to the "Forms" and look for the vehicle worksheet.  On that worksheet, look for the area that is for the "Economic Stimulus" (or Special Depreciation Allowance).  Make sure that the elect OUT box is checked.

[planetjr]

THANKS! That worked.  On the Truck worksheet Part IV line 36f was checked NO. Now checked Yes and the depreciation of $3768 shows up in line 38, and also the  TTax main platform (in adition to the original expenses).

The forum is great, and your input very much appreciated. So glad I don't have to amend and refile.