199A – Qualified Property

Technical topics regarding tax preparation.
#1
WBR  
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“(6)(A)(iii) the depreciable period for which has not ended before the close of the taxable year”

So, fully depreciated property does not count?

But they then go on to describe what depreciable period means

“(6)(B) Depreciable period The term “depreciable period” means, with respect to qualified property of a taxpayer, the period beginning on the date the property was first placed in service by the taxpayer and ending on the later of—
(i) the date that is 10 years after such date, or
(ii) the last day of the last full year in the applicable recovery period that would apply to the property under section 168 (determined without regard to subsection (g) thereof).”

My question is with (6)(B)(ii) would that mean that ACRES Nonresidential real property get treated as 39 years and hence still be in its depreciable period even though it was fully depreciated?
 

#2
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It is my understanding that fully depreciated property does count, as long as the depreciable period has not ended by the close of the tax year. Section 179 property and property that we have taken bonus depreciation on would cause this scenario. May want to reference the attached link as well.
viewtopic.php?f=8&t=13386
 

#3
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Thanks Seaside
 

#4
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What about property that would be subject to depreciation had you not elected to expense it under the deminimus elections?

Lets say your client has 50k of Office equipment that she de minimus expensed because each item was under 2500.00. Is that Qualified property for the 199A deduction calculation?

The code states:

(6)Qualified property.—For purposes of this section:
(A)In general.—The term "qualified property" means, with respect to any qualified trade or business for a taxable year, tangible property of a character subject to the allowance for depreciation under section 167—
(i) which is held by, and available for use in, the qualified trade or business at the close of the taxable year,
(ii) which is used at any point during the taxable year in the production of qualified business income, and
(iii) the depreciable period for which has not ended before the close of the taxable year.
(B)Depreciable period.—The term "depreciable period" means, with respect to qualified property of a taxpayer, the period beginning on the date the property was first placed in service by the taxpayer and ending on the later of—
(i) the date that is 10 years after such date, or
(ii) the last day of the last full year in the applicable recovery period that would apply to the property under section 168 (determined without regard to subsection (g) thereof).

To me, that means tangible property that would have been subject to depreciation, if it had been capitalized.

Any opinions remotely based on facts? :mrgreen:
 

#5
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I have been including it. I also just took another cpe on 199A and the instructor also stated that it could be included.
 

#6
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Seaside, thank you for your answer, and time.
 

#7
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Noobie, just curious. Do you deduct the 50K in deminimus on the, say, Schedule C? Lacerte goes to the depreciation schedule to calculate UBIA. What do you call it on the Schedule C, or whatever the entity is? After the Schedule C deduction, do you then manually put it in for the UBIA calculation? I have been deducting such items as office expense.
 

#8
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I'll let Noobie answer as to how he does it, but I have actually been listing the items on the depreciation schedule with a certain code noting that no depreciation is to be taken. In NC, we have to still keep track of all purchases for property tax listing purposes.

Initially, I used the deminimus deduction. Now that Section 179 is so high, I usually just take that since I have to list it on the depreciation schedule anyway.
 


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