Can I depreciate 50% cost of a bus. equip purchased this year, and other half next year? I know I can depreciate whole amount this year, OR use 5yr MACRS. Thx

4 replies
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I would prefer to do 50% each year. Does IRS allow that?

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Mike9241Answer

Level 15

no. you can play with section 179, bonus depreciation (168k) and regular MACRS to take as much depreciation you want the first year. however, the remaining basis would be depreciated over its useful life for tax purpose. for a 5-year asset depreciation would be over 6 years including 2025. if its listed property like a vehicle it could be even longer

Mike9241

Bsch4477

Level 15

No, you can’t split the depreciation that way. You can, however, take some depreciation (like 50%) under Section 179 and depreciate the rest over 5 years.

Mike9241

Answer

Level 15

Mike9241

mp565Author

Level 2

Thank you both for your answers. That does clear it up some. I guess a follow-up question would be- if I do deduct 50% in year one, it appears I have to deduct the remainder over the following 5 years. What rate in what year would/could that be deducted? Does it have to then be straight line. Is there a max/min percentage for each year? Thank you again for the help.