@mrmoppel wrote:
If you get rid of your numbers, BOTH methods are acceptable (but see later comment about the first one). The first one is the mathematical method and the second one is essentially what the "tables" do. But as I said before, you aren't supposed to start mid-stream (once you start using one method, you are supposed to keep using it).
The unclear part about the mathematical method (the first option you asked about) is how/where the percentage is applied.
- Should it be remaining value IF it had been depreciated at 100%, then divided by 17.5, then multiple by the business percentage?
- Or is it the remaining value factoring in the ACTUAL percentage changes each year (which is what TurboTax does), then apply the current year percentage?
- The IRS Publication about this does not discuss if an asset changes percentage, so a literal reading of the Publication would say this is correct. But Publications are often incomplete and don't cover every matter. I don't remember if the Regulations or other official guidance has address if the percentage is less than 100%.
You've got me curious now; it has been MANY years since I looked into it so I'm going to have to research it to see if there is a clearer answer anywhere.
