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smnorth
New Member

What will the future impact be if I take 50% of a special depreciation allowance vs. 100% this year?

 
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Accepted Solutions
Coleen3
Intuit Alumni

What will the future impact be if I take 50% of a special depreciation allowance vs. 100% this year?

The longer you spread the depreciation the more of it you will be able to deduct each year. You have to try to imagine whether or not you will need these deductions in future years or will this be your highest income year where it will do the most good.

If you take the 50% this year, you can still depreciate the balance over the life of the asset, usually 5 or 7 years. In either case, if business use drops below 50% or you retire the asset you will have to recapture any depreciation you took up front.

You don't state whether you are an employee or self-employed. Employee business expenses will no longer be deductible. You could gamble and take the whole thing now, but there is no way of knowing what will happen with the recapture as the tax law isn't written yet.

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2 Replies
Coleen3
Intuit Alumni

What will the future impact be if I take 50% of a special depreciation allowance vs. 100% this year?

The longer you spread the depreciation the more of it you will be able to deduct each year. You have to try to imagine whether or not you will need these deductions in future years or will this be your highest income year where it will do the most good.

If you take the 50% this year, you can still depreciate the balance over the life of the asset, usually 5 or 7 years. In either case, if business use drops below 50% or you retire the asset you will have to recapture any depreciation you took up front.

You don't state whether you are an employee or self-employed. Employee business expenses will no longer be deductible. You could gamble and take the whole thing now, but there is no way of knowing what will happen with the recapture as the tax law isn't written yet.

smnorth
New Member

What will the future impact be if I take 50% of a special depreciation allowance vs. 100% this year?

Thank you!

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