If we plan on buying a new washer and dryer this year should I just skip depreciating the old set on this years taxes?
TomCopeland 11:32 AM 03-12-2013
Originally Posted by EAP:
If we plan on buying a new washer and dryer this year should I just skip depreciating the old set on this years taxes?
If you were depreciating the old washer/dryer, you can claim all remaining depreciation on it once you discard it. In other words, washer/dryer is depreciated over 7 years. If you are in the fourth year, claim the last three years of depreciation in 2013.
Its the first year ? Should I depreciate it for the full 7 this year?
CrackerJacks 07:15 PM 03-12-2013
I don't think you can depreciate it all until you actually get rid of it, and if I'm not wrong i think you have to actually "get rid of it" (donate, trash or give away for free) and not sell it in order to depreciate the whole value. But I could be wrong
Originally Posted by CrackerJacks:
I don't think you can depreciate it all until you actually get rid of it, and if I'm not wrong i think you have to actually "get rid of it" (donate, trash or give away for free) and not sell it in order to depreciate the whole value. But I could be wrong
Oh - I bet that's in his book - I will look ! Thank you!
TomCopeland 07:41 AM 03-13-2013
Originally Posted by EAP:
Its the first year ? Should I depreciate it for the full 7 this year?
If you buy something that you would normally depreciate, but it doesn't last until the end of the first year, you can deduct the entire business portion in the first year. Doesn't last mean it wore out, or you threw it away.
If you give it to Goodwill or sell it, then you can only claim the depreciation you are entitled to for the first year.
Got it! The dryer is totally shot so that's going to garbage but we will likely sell the washer or donate it - both things will occur in 2013 so I will depreciate both on 2012 and make adjustments for 2013 taxes next year.
Also tax act wants an asset classification for items like washer, oven etc. I don't think it is listed property because I found the definition for that and it has to do with transportaion and entertainment but I am confused if those items are non listed property or something else - I have tried using the IRS glossary of terms for depreciation but these seem to be tax act terms?
TomCopeland 10:11 AM 03-13-2013
Originally Posted by EAP:
Got it! The dryer is totally shot so that's going to garbage but we will likely sell the washer or donate it - both things will occur in 2013 so I will depreciate both on 2012 and make adjustments for 2013 taxes next year.
Also tax act wants an asset classification for items like washer, oven etc. I don't think it is listed property because I found the definition for that and it has to do with transportaion and entertainment but I am confused if those items are non listed property or something else - I have tried using the IRS glossary of terms for depreciation but these seem to be tax act terms?
Listed property would be computers, and property used for entertainment. Furniture and appliances are 7 years 200% DB property. (200% refers to a declining balance method of depreciation)
Originally Posted by TomCopeland:
Listed property would be computers, and property used for entertainment. Furniture and appliances are 7 years 200% DB property. (200% refers to a declining balance method of depreciation)
The drop down menu options for Asset type in Taxact are:
equipment, machinery, etc.
nonresidential real property
other asset
non-listed property
listed property
other nondepreciable asset
I am a little confused if I need to pick one of these or not ? Another drop down menu lets me pick the years for depreciation etc.
TomCopeland 05:20 PM 03-13-2013
Originally Posted by EAP:
The drop down menu options for Asset type in Taxact are:
equipment, machinery, etc.
nonresidential real property
other asset
non-listed property
listed property
other nondepreciable asset
I am a little confused if I need to pick one of these or not ? Another drop down menu lets me pick the years for depreciation etc.
Nonresidential real property is your home and home improvements (39 years).
Listed property is a computer.(5 years)
Non-listed property is furniture, appliances, play equipment. (7 years)
There should be a category for land improvements (15 years)