2011 Tax Return Depreciation

[bekzm]

Yes - 2011 tax return is just now being filed. The only problem I'm finding is he purchased a major asset for $100,000. Right now the profit without the asset is $15000. But in 2012 he received a check in December and did not write any expenses off of it so making his net profit $80,000. My question is the 2011 tax return, can the special allowance apply to 2011 since it is so late. I'm seeing it has to be timely filed and new. Am I correct or can we carry it forward? The business is construction and sole proprietorship. I see the electing out has to be timely but to take the special allowance for 2011 doing the return in 2013

[appelman]

I don't find...

...any mention of timely filing as a requirement for TAKING the special depreciation allowance. You certainly can't carry it forward.

Yes - 2011 tax return is just now being filed. The only problem I'm finding is he purchased a major asset for $100,000. Right now the profit without the asset is $15000. But in 2012 he received a check in December and did not write any expenses off of it so making his net profit $80,000. My question is the 2011 tax return, can the special allowance apply to 2011 since it is so late. I'm seeing it has to be timely filed and new. Am I correct or can we carry it forward? The business is construction and sole proprietorship. I see the electing out has to be timely but to take the special allowance for 2011 doing the return in 2013

[Burke]

I thought he was referring to taking $80K to zero out income and carrying forward under 179 the remaining $20K?

[bekzm]

Expense 179 or use special allowance

So nothing in writing that can not take the special allowance for a major equipment.

Trying to figure out if can expense in 2011 a skid loader under the section 179 which is $90k. When you expense it for the section 179, it will definitely be a big loss for the 2011 tax return which I was taught that cannot take a loss IF take section 179 but I understand you can take special allowance and have a big loss. There will not be anything left to carryover to 2012 depreciation which that is where he needs it. This is the only equipment so it under the section 179 maximum amount. It doesn't help that his wife makes $110k which without that, yes it could be a big loss to carry forward but not happening.
Take the special allowance which will create a loss and get him a huge refund and in 2012 since the BIG deposit of $80k in December and no other equipment to expense for 2012 and pay in 2012 I guess. Is there something I'm missing with the carryover for depreciation?
Thank

[veritas]

When computing the loss limitation

So nothing in writing that can not take the special allowance for a major equipment.

Trying to figure out if can expense in 2011 a skid loader under the section 179 which is $90k. When you expense it for the section 179, it will definitely be a big loss for the 2011 tax return which I was taught that cannot take a loss IF take section 179 but I understand you can take special allowance and have a big loss. There will not be anything left to carryover to 2012 depreciation which that is where he needs it. This is the only equipment so it under the section 179 maximum amount. It doesn't help that his wife makes $110k which without that, yes it could be a big loss to carry forward but not happening.
Take the special allowance which will create a loss and get him a huge refund and in 2012 since the BIG deposit of $80k in December and no other equipment to expense for 2012 and pay in 2012 I guess. Is there something I'm missing with the carryover for depreciation?
Thank

at the corporate level for Sec 179 purposes remember to add back shareholder wages as an adjustment for the loss limitation.

[bekzm]

Not a corporation

It is a sole proprietor.

[veritas]

oops

It is a sole proprietor.

That may make a difference.

[Kram BergGold]

To me you are not being clear

First, if spouse has 100k of wages this is income the section 179 can be used against.
If there is enough income to allow 179 for th eentire purchase but you don't want to use it all then claim 179 for the amount you want and depreciate the rest. This will give you some deduction in 2012.

[Burke]

That is my understanding also assuming MFJ. Software should allow it. Should be able to take it all under 179 if you wish, or some, and carry over the rest to 2012.