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Special Depreciation Allowance

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Level 2

For year 2020 a client has sold multiple tracts of land, not business use.  He also has a farm , he has purchased a large piece of equipment. Based on estimates, I don't believe he can 179 expense the equipment, it will take his farm into a loss. Since 179 can't be applied for this year can the Special Depreciation Allowance then be used? Even with this his income and deductions will cause the AMT to apply. I just want to be sure there isn't something I am missing about the application of the SDA.

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Level 8

@ritastone001 wrote:

Based on estimates, I don't believe he can 179 expense the equipment, it will take his farm into a loss. Since 179 can't be applied for this year can the Special Depreciation Allowance then be used


 Is the land sale and Sched F the only income for this client?  Sec179 can be allowed against W2 income.    Yes SDA can be used if not electing Sec179.

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Level 8

@ritastone001 wrote:

Based on estimates, I don't believe he can 179 expense the equipment, it will take his farm into a loss. Since 179 can't be applied for this year can the Special Depreciation Allowance then be used


 Is the land sale and Sched F the only income for this client?  Sec179 can be allowed against W2 income.    Yes SDA can be used if not electing Sec179.

View solution in original post

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Level 2

Thank you for your response. Sometimes just a simple yes or no answer helps to verify your train of thought is correct! 

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Level 8

You're welcome. Completely understand that.

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