HOW TO ENTER PRIOR ACCUMULATED DEPRECIATION 179 BONUS ON CURRENT TAX YEAR

Expert Solution

Answer -

In December 2017 US law maker passed changes in depreciation rates which is also called bonus depreciation, it is a positive step in reducing the business tax for small business.

This law is going to be in force till 2023 and going to be applicable on purchase of qualified assets after 17 Sep 2017.

Sec 179 bonus depreciation law is can be applied not only on new purchases but purchases which has been first put to use after said date are also eligible.

Bonus depreciation has been increased to 100% for qualified purchases made after September 17, 2017, and remains at 100% until January 1, 2023.

Pls note that bonus provision does not applies on land and buildings. Asset must be used for at least 50% for business purposes.

As far your basic is concerned, Sector 179 bonus depreciation will be added to accumulated depreciation account, or you can also keep the same in following format

Regular Depreciation (with respect to purchases on which section 179 does not apply

Section 179 Bonus depreciation

Total Accumulated Depreciation

As far as impact of accumulated depreciation on section 179 bonus depreciation is concerned. Accumated depreciation should be added with section 179 Bonus depreciation. Pls note section 179 bonus, just relate to current year, not past years.

ekkarill92 answered 1 year ago

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