Small Business Taxes & Management




Small Business Taxes & ManagementTM--Copyright 2019, A/N Group, Inc.



The rules with respect to depreciation and Sec. 179 expensing are constantly changing. The checklist below applies to post-Tax Cuts and Jobs Act (December, 2017) law unless noted. Different rules and limitations were available in earlier years. Depreciation

___ Depreciation rules applicable to autos; lease inclusion amount; see Vehicle Tables
___ Applicable to business, rental property owners
___ Form 4562; Instructions Pub. 946
___ Qualified leasehold improvement, restaurant, retail property; 15-year depreciation; Sec. 179
___ Qualified nonresidential property improvements post-Dec. 31, 2017; qualify for Sec. 179; any interior improvement ___ True purchase or lease?
___ Fiscal year taxpayer rules
___ Short taxable year
___ Basis; acquistion from related party
___ Federal/State/financial differences
___ On Form 4562 reconcile to asset/depreciation worksheets
___ Check for overdepreciation/full depreciation of asset
___ Alternative minimum tax differences--depreciation/basis
___ Autos/trucks/other listed property; % use; greater than 50% threshold for accelerated depreciation
___ Qualified nonpersonal use vehicle exempt from limitations
___ Sec. 179; auto limitations; $25,000 SUV expense cap if GVWR greater than 6,000 pounds
___ Sec. 179; election on original or amended return; revoke election on amended return
___ Sec. 179 limitation; for 2018 $1,000,000; investment limitation $2.5 million phaseout; ($500,000 2016; $510,000 2017; investment limitation $2,010,000 2016; $2,030,000 2017)
___ Sec. 179; taxable income limitation; partner/shareholder level
___ Sec. 179 carryover
___ Sec. 179/depreciation recapture; drop in business use; disposition of property; tax plannng
___ State rules for accelerated depreciation/Sec. 179 limits could be different
___ Safe harbor depreciation autos Rev. Proc. 2019-13
___ Empowerment zone rules
___ Recovery period
___ Off-the-shelf software; Sec. 179; 3-year straight-line
___ Placed in service rule
___ Half-year; mid-month; mid-quarter convention; no depreciation if asset acquired and disposed of in same year
___ Depreciation for short year
___ Like-kind and involuntary conversions
___ First-year bonus depreciation; 50%; new property; election out by class of property--applies prior to Sept. 28, 2017
___ First-year bonus depreciation; 100%; new and used property; property acquired after Sept. 27, 2017
___ 100% bonus; used property; basis determined by cost not carryover, acquistion from related party, like-kind exchange, etc.
___ Amortization of startup, organization, etc. expenses
___ Election for de minimis safe harbor; Sec. 1.263(a)-1(f)
___ Expensing; $2,500 election; $5,000 election (audited financial statements)
___ Computers and peripheral equipment not listed property after Dec. 31, 2017.
___ Election, building expense safe harbor small taxpayers; Sec. 1.263(a)-3(h)
___ Election, capitalization of amounts paid or incurred for employee compensation/overhead as transaction costs
___ Election, capitalize repair and maintenance costs
___ Election, capitalize rotable, temporary, or standby emergency spare parts
___ Election, partial asset disposition
___ Adoption of accounting policy statement
___ Farmers; breeding livestock
___ Farmers; special purpose buildings
___ Depreciable property financed by industrial development bonds
___ Certified historic structure where tax credit taken
___ Environmental remediation costs; Sec. 198
___ Cost segregation analysis for new/improvements to buildings
___ Use of slower depreciation more advantageous? (Election by class)
___ Rev. Proc. 2002-54 to correct prior year underdepreciation
___ Failure to take depreciation; correction on sale; Form 3115; year of sale.
___ Remove assets abandoned, sold or otherwise disposed of from balance sheet
___ Requirement to file Form 3115 (Instructions), Application for Change in Accounting Method

Copyright 2019 by A/N Group, Inc. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is distributed with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional service. If legal advice or other expert assistance is required, the services of a competent professional should be sought. The information is not necessarily a complete summary of all materials on the subject. Copyright is not claimed on material from U.S. Government sources.--ISSN 1089-1536

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--Last Update 02/14/19