What is special depreciation (also called bonus depreciation) and how is it calculated?
The program automatically computes a special depreciation allowance for property placed in service in 2020 when the asset has MACRS depreciation method of 20 years or less. See Form 4562 instructions for Line 14 for more information.
To override this, use the Special depreciation allowance: 1=yes, 2=no[O] field in the Depreciation input screen.
- For qualified improvement property (QIP) of 39 years placed in service before January 1, 2018 enter 1 to calculate special depreciation allowance.
- Enter a 2 to shut off the allowance if the property does not qualify. Enter a 1 to force the program to compute the allowance on other property
Detailed information can be found here, IRS Pub. 946
Special Depreciation State Considerations:
The program automatically calculates states that do not follow Federal special depreciation. To override the state special depreciation, enter an amount or -1 for none, in Current Special Depreciation (State Column). For states with prior special depreciation, enter an amount, or -1 for none, in Prior Special Depreciation Allowance (State Column).