168K late election for 2020?

Technical topics regarding tax preparation.
#1
EADave  
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Hello all, I hope everyone is making it through this crazy tax season!

Quick question, client placed QIP in service during 2019 and they elected out of Bonus Depreciation for that year. The QIP qualified as 15 year property; can I make a "late" election on the 2020 return to claim the Bonus Depreciation that wasn't claimed on the 2019 return? Or, am I stuck with amending 2019?

I spotted this in Rev Proc 2020-50, which gives me some hope, but I want to make sure I am applying it correctly. And, does anyone know offhand the DCNs for this change? THANK YOU!!!

From Rev Proc 2020-50
"A taxpayer that wishes to make a late election or revoke an election, as applicable, may either:
File an amended federal income tax return, amended Form 1065 or AAR by Dec. 31, 2021 (but not after the applicable period of limitations on assessment)
***Attach a Form 3115 to an originally filed return for the first or second taxable year succeeding the taxable year in which the affected assets were placed in service (or, if later, on a tax return that is timely filed between Nov. 6, 2020, and Dec. 31, 2021)."
 

#2
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I posted a similar question yesterday and I also was referred to Rev Proc 2020-25 that was expanded upon by 2020-50.

Good luck!
 

#3
EADave  
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It does appear, according to 2020-50, that the taxpayer will be allowed to elect the Late Election for Bonus Depreciation on the 2020 return, but I don't know, "I DON'T KNOWWWWWWW...." Quote from Seymour's song in The Little Shop of Horrors (80s movie, not the play). *Cough, Cough, Coddington...*
 

#4
EADave  
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I should add some back story here. Client thought it would be wise to Not Elect Bonus Depreciation on the 2019 return because they knew income would be higher in 2020.

Fast forward to 2020, and client doesn't have the funds to pay 2020's tax liability (what a surprise!!!). So, my last minute thought was, maybe we can push/elect that Bonus Depreciation on the 2020 return, and Dave saves the the day! Doable, or not???

BEERS ON ME!!!
 

#5
EADave  
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I found my answer, the answer is YES! But, it must be filed on a timely return, so.......I better get to it!

And, for anyone that wants to know, the DCNs to use are 7 and 241. BEERS ON YOU!!!
 

#6
HowardS  
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DCN 245 to revoke an election out of bonus depreciation.
241 was a 2017 thingy.
Retired, no salvage value.
 

#7
EADave  
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Ahhh, thank you Howard, I appreciate that! I don't know why my software no longer has this DCN (245) as an option.
 

#8
HowardS  
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So, my last minute thought was, maybe we can push/elect that Bonus Depreciation on the 2020 return

If you take bonus it must be in the year placed in service but by revoking the 2019 election out of bonus your 481(a) adjustment has the same effect as pushing bonus into 2020. It would not be a late election.
Retired, no salvage value.
 

#9
EADave  
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Yes sir, that makes perfect sense, thank you for the clarity!
 


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