Purchased carpenting and flooring for rental property in 2011.  States do NOT allow Bonus Depreciation, so I do not want hassle of tracking every year.   Believe this is 5 year life so NO big deal.   It says I have to attach statement to return giving reason why I elected out.  Tax software is allowing 200% depreciation so plenty for me.
Am I correct?   
 5 year property?  Is it okay to opt out Bonus Depreciation for reason I cited (don't want confusion in future years with State Returns.
Thanks so much
    I don't know about carpet, but the cost of the new flooring is added to the cost basis of the property and is in fact, an asset that should be depreciated. If you do not depreciate it, then when you dispose of or convert the property, you have to take back the depreciation (weather you depreciated it or not) and pay tax on it. So unless you qualify for some type of exception to this  (which you would explain in your attached letter) you can pay tax on the depreciated value later, or you can pay tax on the depreciated value now "AND" later. Keep in mind that that IRS does not care about state tax rules. We're talking about your federal taxes here.
    • Just to clarify the flooring was just granite slabs to be decorative with the new carpeting.  I don't believe it has to be added to the basis of the rental property, just simply set up as a depreciable iitem titled perhaps, improvements.

      My question is it a big deal to opt out of the 100 % bonus depreciation since I need to do two state returns which do not allow bonus depreciation. I recognize the IRS is not concerned over state rules but I do and hate the thought of keeping track of this for the nect several years.
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