Can excessive bonus depreciation over business income be used to offset the other income (such as W-2) of the taxpayer in the same year?
Taxpayer started a delivery/courier business late in 2012. He has about $500 of income only. He bought a business car on 12-20-2012. The tax rule says the maximum bonus depreciation for a business-used car (under 6,000 lbs) is $11,160 in 2012. So he will have a loss of $10,660 ($500-$11,160). If I remember correctly, I think I have read somewhere before that excessive bonus depreciation over business income has to be carryforward to the next year. But today when I plugged the figures into my tax program, it actually used the $10,660 loss to offset the W-2 income of the taxpayer in 2012. So is the program incorrect or is my memory wrong?
Taxpayer started a delivery/courier business late in 2012. He has about $500 of income only. He bought a business car on 12-20-2012. The tax rule says the maximum bonus depreciation for a business-used car (under 6,000 lbs) is $11,160 in 2012. So he will have a loss of $10,660 ($500-$11,160). If I remember correctly, I think I have read somewhere before that excessive bonus depreciation over business income has to be carryforward to the next year. But today when I plugged the figures into my tax program, it actually used the $10,660 loss to offset the W-2 income of the taxpayer in 2012. So is the program incorrect or is my memory wrong?
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