Hi,

A client of mine formed an s-corp and purchased a business's assets last year for $800,000. $600,000 for intagible property and $200,000 in furnature and equipment. He took a loan out for $400,000 and paid the other $400,000 directly from his personal account. If we take the 200K as bonus depreciation, the company will generate a 200K net loss which he'd like to take on his 1040 against other income. I have 2 concerns with this:

1. If we say that he contributed the 200K in furniture and equipment to the s corp, can he take 200K in bonus depreciation? I'm reading that used property qualifies but the property cannot have been used by the taxpayer or a predecessor at any time prior to such acquisition. Being that the predecessor used the propery in a prior business, I'm not sure if this will work?

2. Would it be better to contribute the property to the s corp to create basis or have the owner draft a loan from owner to the s corp as of 12/31/2021 to create debt basis?

Thanks!