topic 150DB Depreciation Calculations Incorrect? in Business & farm

150DB Depreciation Calculations Incorrect?

IowaStateFan — Mon, 02 Nov 2020 02:22:18 GMT

I have a 7-year asset purchased in 2014 and 150DB/HY was selected as the method/convention. The cost basis was $6,500. I've used several depreciation calculators and they all say the same values shown below in the "Calculator" column; however, TurboTax has deducted the values in the "TurboTax" column:

	Calculator	TurboTax
2014	696	696
2015	1244	1244
2016	977	977
2017	768	796
2018	603	796
2019	474	796
2020	1738	????

Why are years 4, 5 and 6 "stuck" on 796 and not following what seems to be the consensus via the calculators? Other assets of mine are different starting in year 4 as well (5-year assets).

Re: 150DB Depreciation Calculations Incorrect?

Anonymous_ — Mon, 02 Nov 2020 02:35:25 GMT

See https://www.irs.gov/publications/p946#en_US_2019_publink1000107576

Declining Balance Method

When using a declining balance method, you apply the same depreciation rate each year to the adjusted basis of your property. You must use the applicable convention for the first tax year and you must switch to the straight line method beginning in the first year for which it will give an equal or greater deduction. The straight line method is explained later.

Re: 150DB Depreciation Calculations Incorrect?

Critter-3 — Mon, 02 Nov 2020 02:40:48 GMT

You are not looking at the correct table ... https://www.irs.gov/pub/irs-pdf/p946.pdf

6500 x 12.25 = 796

Re: 150DB Depreciation Calculations Incorrect?

Anonymous — Mon, 02 Nov 2020 05:14:36 GMT

the tax laws say when the remaining basis divided by the remaining life is more than the % depreciation method you switch to straight line - the remaining basis divided by the remaining life.