What is special depreciation allowance

[VictoriaD75]

It is a tax planning alternative. If you take special depreciation in the year of purchase, you do not have any depreciation to take in future tax years. If you already have a business loss or lower income in the current year, it may be wise to defer the depreciation into later years, especially if you expect income to increase without additional capital assets to reduce the taxable income.

[ccopley]

Where do I put my depreciation for my vehicle? What Category? 

Can I used miles and Depreciation for my work vehicle"?

Thank you

[PattiF]

If you were asking about using your employee vehicle expenses as a deduction, that is not possible at this time.

Under the Tax Cuts and Jobs Act (TCJA) that Congress signed into law on December 22, 2017, the unreimbursed employee expenses deduction has been suspended in tax years 2018 through 2025. There are some exceptions where you can still use Form 2106 through tax year 2025, including if you were an Armed Forces reservist, qualified performing artist, fee-basis state or local government official, or an employee with impairment-related work expenses.

State taxes: Job-related expenses might be deductible in your state even if they’re not deductible on your federal return. You can enter your expenses as below and we’ll figure out if you can deduct them.

If you’re self-employed or own a business, enter your business-related expenses on Schedule C instead.

Instructions

Here's how to enter your job-related expenses in TurboTax 2018 or 2019 if you meet the requirements mentioned above):

1. Open (continue) your return in TurboTax if it's not already open.
2. In TurboTax, search for 2106 and then select the Jump to link in the search results.
3. At the Tell us about the occupation you have expenses for screen, enter your occupation, then select Continue.
   • If you land on the Job-Related Expenses Summary screen, you can select Add Another Occupation (to add another 2106), Edit (for an existing 2106), or Delete.
4. Follow the onscreen instructions to enter your employee expenses.

[ccopley]

I have no employees. I bought this vehicle for Business used only in 2015. I have depreciated it every year, but Turbo Tax is telling me I have No depreciation for this year,,,, This is the last year and it should be $5697 and it keeps telling me 0.....

can't I talk to someone who can run through this with me????

[ccopley]

it is on a 5 year schedule...2019 is the last year we can take it.

[ccopley]

I thought that when I bought Turbo tax I got a Tax Expert to help? how do I fi d that person?

[MichelleLO]

If you purchased one of the TurboTax Live products, you can definitely reach out to an expert for help. Please see the below TurboTax FAQ to assist with connecting to an expert:

How do I connect with a tax expert in TurboTax Live?

@ccopley

[Burracas62]

Where can I find the special depreciation in my income taxes forms?

[ReneeM7122]

To depreciate your assets in TurboTax, 

Click the "Federal Taxes," then "Deductions."

Click "Start" or "Edit" on the "Your Deductions Screen" and follow the instructions to enter the details of the asset.  You will include its starting value and recovery period. 

Here is a TurboTax article about special depreciation and an IRS link about how to depreciate property.

Related Information:

• What is MACRS and MACRS convention?
• What is a Section 179 deduction?
• What is depreciation?

[Weisheit]

I don't want to be bothered with the special depreciation allowance how do I opt out.  It comes up as an error in my return

[Trbo381]

I have this same message (Special Depr Allowance must be entered) popping up in Federal Review for a Rental Asset (Refrigerator), doesn't let me proceed further.

[SsentialSolutions]

I know this is a late reply but thought it might be useful for someone else if they run into the same issue:

It probably doesn't matter either way in your situation since your loss will be used when you sell the property to lower your capital gains. What happens when you take depreciation is it lowers your basis in the property, which then increases your capital gains (the income claimed on the return from the sale of the rental property). Capital Gains is determined by the difference between the sale price and your basis in the property (which is essentially the purchase price plus improvements less depreciation already claimed). However, Since you weren't able to take the loss from your rental property it has been carried over and when you sell the property the carryover loss will be used on the return to lower income.  

Unless you had net income from the property and the 50% special depreciation is what is making your rental income negative and you will have a gain on the sale of the property... in which case you will probably be better opting out because of the net investment income tax (3.8% tax) and higher effective tax rate that will occur from selling the property. It will be better to minimize your income in the year of the sale as much as you can.

[Vincenzo72]

We've owned a rental for 15 years and renovated/sold it last summer.   Can we take the Special Depreciation on the renovation total- landscaping, windows, appliances, floors, carpet, paint, pretty much everything?  We've sold it so we won't be able to take the SDA ever again.

[JillS56]

No, once you sold the property you cannot take special depreciation allowance and you would not want to take the special depreciation allowance.    When you have rental property any depreciation reduces the basis of the property which increases the capital gain.   When sold, the depreciate is added back (recoup) to bring the costs basis back to the original cost basis.   The recoup portion is taxed as ordinary tax rates.   The amount of profit above the original cost basis and the profit would be considered capital gains and taxed at capital gains rate.  Capital Gains is determined by the difference between the sale price and your basis in the property (which is essentially the purchase price plus improvements less depreciation already claimed).