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Can someone help me understand this depreciation?

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Level 15
Level 15

New client, came in with a 2018 printout, he's a sole prop Sch C and Im trying to set up his company truck on the car and truck worksheet...this is what the report shows, but I dont understand what this Exclusion is...

depwithexclusion.jpg


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 12

Sorry for the late response ...

 

It seems like that 79.17% is the PERSONAL percentage.  And the "exclusion" is the personal percentage of use (79.17%).  So the report is just showing the total Basis on the first line, then subtracting the personal percentage on the second line, resulting in the Business Basis on the third line.  Does that make a little more sense?

So for ProSeries, all you need to do is enter the Total Basis ($56,665) and the "Prior Depreciation" of $4266.  Then let the program do its stuff.

Straight Line is usually part of MACRS, so yes, ProSeries will list it as MACRS.  Just makes sure it says SL (the program should automatically do that because the business percentage is under 50%)

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5 Replies 5
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Level 15
Level 15

I think I found it!   His printout was all scrambled up from a re-fi, all the pages printed front to back (making me crazy!)...I finally found the 4562 and it looks like his percentage of business use  was only 20.83% as business.

It also shows SL, ProSeries automatically assigns MACRS, Im not seeing  away to change it.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 10

That sounds right (at least the math works).  @TaxGuyBill is great with this stuff, I almost always just use standard mileage.  With <50% business use aren't you stuck with straight-line?  I'd get the full tax history to make sure the client didn't step on a recapture land-mine somewhere along the way.

Rick

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Level 15
Level 15

@rbynaker wrote:

That sounds right (at least the math works).  @TaxGuyBill is great with this stuff, I almost always just use standard mileage.  With <50% business use aren't you stuck with straight-line?  I'd get the full tax history to make sure the client didn't step on a recapture land-mine somewhere along the way.

Rick


I just edited my post, I didnt see any responses and couldnt tell anyone was typing, sorry.

So hes got lots more business use this year, closer to 80% so how does that work?  Can I switch it to MACRS?


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
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Level 15
Level 15

I think the preparer last year got his business and personal miles flip flopped.


♪♫•*¨*•.¸¸♥Lisa♥¸¸.•*¨*•♫♪
Highlighted
Level 12

Sorry for the late response ...

 

It seems like that 79.17% is the PERSONAL percentage.  And the "exclusion" is the personal percentage of use (79.17%).  So the report is just showing the total Basis on the first line, then subtracting the personal percentage on the second line, resulting in the Business Basis on the third line.  Does that make a little more sense?

So for ProSeries, all you need to do is enter the Total Basis ($56,665) and the "Prior Depreciation" of $4266.  Then let the program do its stuff.

Straight Line is usually part of MACRS, so yes, ProSeries will list it as MACRS.  Just makes sure it says SL (the program should automatically do that because the business percentage is under 50%)

View solution in original post