I have a partnership that has an increase in depreciation due to the change in accounting for depreciation in a prior year. My question is where do I report this on the K-1 for thsi rental property? My two options appear to be: to increase the loss on line 2 (net rental income or loss) or line 13 (other deductions). I am leaning toward line 13.
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Sabre
" You don't learn much from the second kick of a mule." -
To Gort
I have seen "specially allocated depreciation" on 13 Code W. But that is all the explanation. Because of the instructions for that line, I felt the only place it could be taken in on Sch A subject to 2 %. If you're talking about something big that'll make a difference I would like your first suggestion better. Then the K1 recipient can get a better deduction.Originally posted by glenncpa View PostJG -
481(a) Adjustment
I checked with the tax specialist at KBKG, Inc. they did the cost segregation study on the commercial building in question. It is a 3.2 million dollar building that was placed in service in 2008 and the client was using another CPA. They came to me because they didn't feel like they had gotten much attention. After reviewing the situation and realizing that we could do the cost seg in 2009 and take all the catch up depreciation in 2009 i encouraged my client to commission the study to the tune of $7,000. What did my client get- from 2008 we got to take a $188,443 depreciation deduction and i increased the 2009 depreciation from $92,000 to $270,000. In total the partners will save about $156,000 in taxes for 2009. Not to mention increased depreciation for the next 15 years as opposed to waiting 39 years.
The 481(a) adjustment is to appear as an other deduction on the rental schedule itself.
I have no financial interest in KBKG but they know what they are doing and went above and beyond my expectations.Sabre
" You don't learn much from the second kick of a mule."Comment
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