Entity started in 2016 and then got dissolved in the same year in less than 6 months. It had an asset subject to bonus depreciation. Will the entity get 100% bonus depreciation for the short tax year?
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There is no depreciation for assets held less than 1 year.Originally posted by Florida_EA View Post -
The entity that held the assets was a partnership (P) and it got dissolved in less than 6 months. The partnership P had 2 members (one a partnership P1 and the other an individual I) and the partnership P1 bought the interest of the other member I. Hence the original partnership (P) became a disregarded entity. P1 inherited the assets and wants to continue depreciation with the new adjusted basis.Originally posted by kathyc2 View Post
In that case can P and P1 still depreciate the assets?Comment
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Just my opinion, but I would say the answer depends upon if the partnership was a LLC taxed as a partnership, or just a regular partnership. If LLC then the entity still holds the asset, but the way the entity is taxed will change. If the entity was just a partnership, then it doesn't live on and since it held the asset less than 1 year, no depreciation.Originally posted by Florida_EA View Post
Reading this again it sounds like even if it was a LLC, it was effectively dissolved? That it is not a partner in P1, but rather P1 took over the assets?Last edited by kathyc2; 09-07-2017, 11:46 AM.Comment
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The partnership that held the assets is an LLC taxed as a partnership by default. Let us call him P. The partners are P1 (another partnership) and an individual. P1 buys the individual's interest and hence P becomes a disregarded entity that P1 owns. P1 hence takes over the assets. So I think depreciation should apply for P and then P1?Comment
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