Basis in Excess of 179

[JoshinNC]

Client took 179 deduction in 2004 on van that did not qualify as unlimited. Cost was $27,630, so 179 taken in 2004 was $25,000. What do I do for 2005 with the excess ($2630) cost basis that was not expensed? Is it recaptured over 4 or 5 years, expensed in 2005 or just lost forever?

Thanks in advance!

[Deltax]

Client took 179 deduction in 2004 on van that did not qualify as unlimited. Cost was $27,630, so 179 taken in 2004 was $25,000. What do I do for 2005 with the excess ($2630) cost basis that was not expensed? Is it recaptured over 4 or 5 years, expensed in 2005 or just lost forever?

Thanks in advance!

Asset cost= $27630
179 ded = #25000 in 2004

Bal = 2630
$2630 should have been depreciated starting in 2004 for the life of the asset. 2005 would be the 2nd year of dep.

[JoshinNC]

Ok

So, should I just calculate the depreciation that was not taken in 2004 and put that down as prior deprection and take 2nd year depreciation for 2005?

[Deltax]

So, should I just calculate the depreciation that was not taken in 2004 and put that down as prior deprection and take 2nd year depreciation for 2005?

Correcto Mundo My friend Prior year depreciation will include the 25000 expensed

[JoshinNC]

Thanks!

I appreciate your timely responses.