New HVAC

[Lovisa]

I've read through many of Tom's articles and can't make heads or tails of how I go about depreciating the new HVAC I am having put on my house next week. Do I depreciate it over the 39 years or do I first deduct 50% of it, then depreciate the rest at the 39 years??? Basically, I don't know if a HVAC qualifies for the 50% bonus depreciation. Thanks in advance for any help!

[TomCopeland]

Originally Posted by Lovisa

I've read through many of Tom's articles and can't make heads or tails of how I go about depreciating the new HVAC I am having put on my house next week. Do I depreciate it over the 39 years or do I first deduct 50% of it, then depreciate the rest at the 39 years??? Basically, I don't know if a HVAC qualifies for the 50% bonus depreciation. Thanks in advance for any help!

The rules changed in 2018. Take the total cost of the HVAC and multiply by your time-space %. Then deduct this amount on your 2018 taxes. In 2018 there is a 100% bonus depreciation rule that says everything you buy (except for a home and addition to your home) can be deducted in one year, and doesn't have to be depreciated. This is a big deal!

[Lovisa]

That is FANTASTIC! Thank you for the help!

[storybookending]

Originally Posted by TomCopeland

The rules changed in 2018. Take the total cost of the HVAC and multiply by your time-space %. Then deduct this amount on your 2018 taxes. In 2018 there is a 100% bonus depreciation rule that says everything you buy (except for a home and addition to your home) can be deducted in one year, and doesn't have to be depreciated. This is a big deal!

So if I’m looking at replacing all of my windows I would be better off doing it in 2018 rather than waiting a few years?

[TomCopeland]

Originally Posted by storybookending

So if I’m looking at replacing all of my windows I would be better off doing it in 2018 rather than waiting a few years?

The 100% bonus depreciation rule is not set to expire. Things can always change in later years, however.

[storybookending]

Originally Posted by TomCopeland

The 100% bonus depreciation rule is not set to expire. Things can always change in later years, however.

Man I wish I was closer so I could be your client hahaha


Thank you for the information.

[Lovisa]

Hi there, one more question if I could, Tom.

How does it work if we financed the HVAC and didn't just pay cash for it? If we are paying say $200 a month for a set number of years on it through a program called the HERO program (with this program, the whole amount of the new HVAC basically gets attached to our mortgage payment which in turn ups our mortgage payment per month for a set number of years), would I still deduct it in its entirety as a time/space % for the 2018 year, or use the time/space% for 12 separate expenses of $200 each throughout the year?

I hope that makes sense

[TomCopeland]

Originally Posted by Lovisa

Hi there, one more question if I could, Tom.

How does it work if we financed the HVAC and didn't just pay cash for it? If we are paying say $200 a month for a set number of years on it through a program called the HERO program (with this program, the whole amount of the new HVAC basically gets attached to our mortgage payment which in turn ups our mortgage payment per month for a set number of years), would I still deduct it in its entirety as a time/space % for the 2018 year, or use the time/space% for 12 separate expenses of $200 each throughout the year?

I hope that makes sense

Still deduct it entirely in 2018!

[Lovisa]

Originally Posted by TomCopeland

Still deduct it entirely in 2018!

That is so awesome!