Negative Depreciation

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  • Jill Graff
    Member
    • Jun 2005
    • 55
    #1

    Negative Depreciation

    Situation: Partnership (Farm) claiming a Sec 754 election. Assets have been appraised. Most of the assets have a step-up in basis. For the assets with a step-down in basis, do I take negative depreciation?

    Thanks in advance.
    Tags: None
    • Nashville
      Senior Member
      • Nov 2007
      • 1129
      #2
      Don't think so

      The beauty (or curse) of step-up is that no income is attributable to the increase in carrying value. For the same reason, no expense would be attributable to the loss in carrying value, if any.

      What has given rise to the ยง754 election??

        Comment

        • Jill Graff
          Member
          • Jun 2005
          • 55
          #3
          Death

          The 85% partner died. That's the reason for the Sec 754 election.

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