Do you have any assets that you acquired and started using after September 27, 2017?

[ipc1]

Does this mean:

1) you acquired the property after September 27, and started using it after this date.

or

2) you acquired the property before September 27, and started using it after this date.

[DanO · Accepted solution]

Acquired the property after September 27, and started using it after this date.

If the property was acquired before September 28 and placed into service after September 27 then the asset would not qualify for the bonus depreciation of 100%.

[ipc1]

How does the asset qualify for the bonus depreciation of 50%?
In turbotax how is an election made to not deduct the special depreciation allowance?

[DanO]

If you placed a “NEW” qualified asset in service before September 28, 2017, then you would qualify for the 50% bonus depreciation, or if you acquired and placed a “NEW or USED” qualified asset in service after September 27, 2017, then you can elect to use the 50% bonus for the first tax year after September 27, 2017.

In TurboTax, you will need initially select 50% or 100%, but when you go through the interview for depreciation of an asset you will have the chance to select;
Taking the 179 in full, or take a partial 179 with the remainder depreciated over the life of the asset, or depreciate the asset over the life of the asset without taking any 179.
You have two choices regarding the bonus depreciation that you can ignore, and the bonus will not be applied in any way.

[ipc1]

As I go through the interview for the depreciation of the asset, I don’t get the choses that you describe. There are six steps in the process with sixth step being the Asset Summary.

[ipc1]

The assets were acquired prior to September 27, 2017, and started using in November 2017.

[DanO]

You might need to close out of TurboTax and log back in.  I needed to log out to get the following;
I'll spread the deduction over several years.
I'll deduct the full value of the item this year.
I'll take a partial section 179 this year.

Additional options available only if the original use of the property begins with you.

I'll take a partial section 179 deduction this year and the 50% special depreciation allowance.
I'll take the 50% special depreciation allowance and spread the remainder over several years.

[ipc1]

Exited TurboTax, then restarted but still don’t get the choices.

[ipc1]

The rental property is overseas and therefore a foreign asset depreciated using ADS.
I read that for the Special Depreciation Allowance qualified property does not include any property required to be depreciated under the alternative depreciation system (ADS) (that is, not property for which you elected to use ADS).
Is this why the interview section for an asset does not include a screen for this depreciation?
Also, don’t get a screen for 179, what would be the reason for this?

[DanO]

Real property does not qualify for the Section 179 and bonus depreciation. The rental will depreciate over 40 years.

[ipc1]

Should the new built-in kitchen cabinets be depreciated over 40 years?
Should the new built-in kitchen appliances also be depreciated over 40 years?

[DanO]

The kitchen cabinets and be depreciated over 40 years, the appliances can be depreciated over the life of the appliances which would be 5 years.

[ipc1]

Thanks, for clarifying that built-in kitchen cabinets are depreciated over 40 years.
The property is outside the US so for the built-in kitchen appliances using ADS gives 9 years rather than 5 years.
Do I have a choice for the built-in kitchen appliances, of using 9 or 40 years?

[DanO]

You would need to go with 9 years, 40 years would not be considered the useful life of an appliance.