sold asset - never depreciated

[oceanlovin'ea]

Client told me they sold trailer this year. I couldn't find it on the depreciation schedule so I asked when they bought it. They bought it in 2006 which was the first year I did their taxes.

Since it is selling, I have to take depreciation allowed or allowable even though I never took it.

Can I use a method that would give them the lowest amount such as straight line?

This is a trailer used to haul land clearing equipment. Would that be 7 year property?

Linda, EA

[ChEAr$]

Client told me they sold trailer this year. I couldn't find it on the depreciation schedule so I asked when they bought it. They bought it in 2006 which was the first year I did their taxes.

Since it is selling, I have to take depreciation allowed or allowable even though I never took it.

Can I use a method that would give them the lowest amount such as straight line?

This is a trailer used to haul land clearing equipment. Would that be 7 year property?

Linda, EA

yep, 7 year property. At least you can go back and amend some returns before 4/15.
(not 4/18!)

[Gretel]

File form 3115 to catch up all the missed depreciation.

[erchess]

W O W

I did not know that depreciation allowed or allowable applied to property other than real property. Thinking back, I don't believe I have had this come up in my practice.

[AZ-Tax]

Double wow to my TP's but not to me

I have told TP after TP about this "if it was allowed, the IRS considered it be depreciated regardless if it was actually depreciated" and to this day their response is the same "thats not fair". When was the overall IRS code ever fair to everyone? Come on I need a date : )

[oceanlovin'ea]

Does it apply to all property?

Is it easier to file the Form 3115 than amend 3 years returns? Does that mean all the depreciation is taken in this year?

Linda, EA

[Gretel]

Does it apply to all property?

Is it easier to file the Form 3115 than amend 3 years returns? Does that mean all the depreciation is taken in this year?

Linda, EA

IRS says to only amend if for one year only and to use form 3115 if multiple years are involved. Form 3115 is a ***** and I think it changed after I have used it in 2004. All depreciation is taken in current year if form 3115 is used.

[JG EA]

Also it may have been taken as an expense back then and therefore zero basis.

[JenMO]

I thought you could use a one year on 3115, now. Rev Proc 97-27 or Rev Proc 2002-9, unless I'm misreading.