Level 3

Depreciation

Forum|Forum|6 years ago
April 26, 2020
3 replies
18 views

I am preparing 2019 Corp 1120 Tax Return with a prior year (2018) vehicle owned by the Corp. (single member)

1. Passenger vehicle

2. Used 80% of the time for business

3. Placed in service 2/12/2018

4. Did not take any bonus depreciation

2. No section 179

Does the Corp have to elect out of Section 179?

Thank you,

LaDonna Powell

This topic has been closed for replies.

sjrcpa

Level 15

179 itself is an election. There is nothing to elect out of. Also, it is only applicable for the year an asset is placed in service.

The more I know the more I don’t know.

G

goshen9882

Intuit Community Champion

Actually the property is not eligible to begin with as it was not acquired from an unrelated party which is one of the requirements under Section 179.

Additionally, while used property is eligible, under Section 351, when contributed the holding period tacks, so this property contribution would not apply as it is really just a carryover from the sole proprietorship.

sjrcpa

Level 15

@goshen9882 I know we have to use our mind reading skills to answer a lot of questions here but I don't see where you got acquired from a related person and Section 351.

The more I know the more I don’t know.

rbynaker

Level 13

@LADONNAPTAX wrote:
2. Used 80% of the time for business

Maybe there's more than one way to do this correctly, but how does a corporation have 80% business use of a vehicle? I've always done 100% business use and included any personal use in the employee/owner's W-2 as a taxable fringe benefit.

sjrcpa

Level 15

Same here.

The more I know the more I don’t know.

rbynaker

Level 13

@LADONNAPTAX wrote:
4. Did not take any bonus depreciation

There is a written election required (in this case filed with the 2018 return) to opt out of bonus depreciation.

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