Other property depreciation 5 yrs 200DB MQ convention $310 basis

[mother2002chang]

Hi,

The other property costs $310. Service date 9/25/2023. recover: 5 years, 200DB, MQ convention.

CPA reported depreciation $47 for 2023.  For 2024 depreciation, I used TurboTax premium and it reported $86, however the online MACRS depr. calculator gave $47 for 2023, but for 2024 it's 105. Can you let me know which one is correct.

The URL for calculator is https://goodcalculators.com/macrs-depreciation-calculator/

[Mike9241 · Accepted solution]

105 is correct. you must enter the prior depreciation taken and the proper date in service for the computation to be correct.

date acquired xx/xx/2023

date in service xx/yy/2023.  xx must be 10 11 or 12

prior depreciation 47 for regular and AMT

(310-47) = 263* 40% = 105.2 rounded to 105

by the way with such a small amount you could have taken it as a deduction in 2023 rather than capitalizing and depreciating.

expensing policy - De Minimus Safe Harbor 

allows expensing single items costing $2500 or less but must include the de minimum safe harbor election

the election is included 

for the future

it sort of hidden in Turbotax it's under the asset section 

then it asks did you buy anything that costs $2,500 or less answer is yes if that's the case

on the next page you have to answer the question about consistency - you can start a new policy of expensing items costing $2500 or less. this policy must be followed in future years. it's up to you. 

[mother2002chang]

Hi Mark,

Thanks.  After I changed to 10/1/2023.  The depreciation is $105 instead of 86.  Is it because MQ?

9/25/2023 is 3rd quarter and 10/1/2023 is 4th quarter.  Why it can't accept 9/25/2023?

I thank you for letting me know item < $2500 should be expensed instead of depreciated. I don't know why CPA depreciated(She did for my 2023 tax because I sold a property and it's kind complicate based on my tax knowledge). I like to expense it in 2024 Turbotax.  Can I expense the balance $263 ($310-47)?

When I sell this product in 10 years,  this $310 water heater should all be depreciated.  Will it be included in the depreciation recapture or just the building depreciation should be counted in depreciation recapture?

[RobertB4444]

Changing the depreciation convention would certainly explain a $20 difference in depreciation.

You can't expense an item you are already depreciating.  In order to expense this item you would need to go back to your 2023 return and amend it to expense the item instead of depreciating before you file your 2024 return.

When you sell the product it will contain all of the items that you have depreciated.  Depreciation recapture may be necessary on any items included in that sale.

@mother2002chang