Special Depreciation Allowance Deduction & AMT Special Depreciation Allowance Deduction

[iambene21]

I am trying to file my taxes with TurboTax but now I am stuck with these two sections I don't know how to answer. Schedule C k: Special Depreciation Allowance Deduction, and l: AMT Special Depreciation Allowance Deduction. Please help

[JamesG1]

Do you have a question about special depreciation or are you receiving Review errors about special depreciation?  Please clarify.

Taking bonus or special depreciation is an election that you may make on the tax return if the asset or assets that were purchased qualifiy for the bonus or special depreciation treatment.  You may elect one asset for bonus or special depreciation treatment and another asset not to receive bonus or special depreciation treatment.

Bonus or special depreciation allows for 100% bonus "expensing" of assets that are new or used.  See TurboTax Help here.

The percentage of bonus depreciation phases down in 2023 to 80%, 2024 to 60%, 2025 to 40%, and 2026 to 20%. After 2026 there is no further bonus depreciation. 

This bonus "expensing" should not be confused with expensing under Code Section 179 which has entirely separate rules, see the TurboTax Help.

All depreciable items are re-computed under the Alternate Minimum Tax rules.  

AMT special depreciation reports the depreciation under the Alternate Minimum Tax rules.

[tacker99]

Yeah but what does it mean to enter something in the blank for Special Depreciation Allowance.  I didnt enter any property this year- its referencing like something I bought for work a couple of years ago.  can i leave this blank?

[PatriciaV]

If the question relates to an asset you reported in prior years, you may need to research the Special Depreciation taken in the year you placed that asset into service. However, in most cases, you may enter zero for both regular and AMT Special Depreciation to resolve the SmartCheck message.

[tacker99]

Okay so type 0

for some reason I was going to enter in 50% of the value of the device I d purchased .

[PatriciaV]

It's possible you did claim Special Depreciation on an asset you purchased in the past. You will need to check the prior year Depreciation Report to confirm the amount that was claimed, as that would reduce the balance used to calculate this year's depreciation expense. There's a similar report for AMT.

Confirming the actual amount is important because the allowable special depreciation percentage has changed since 2022:

2018 - 2022 = 100%

2023 = 80%

2024 = 60%

@tacker99