Is Bonus Depreciation allowed in year of death?

[dmj4]

Can bonus depreciation be claimed on an asset purchased in the year the Taxpayer dies?

Taxpayer files MFJ 1040 return with a Schedule F.

Taxpayer purchased farm equipment that otherwise qualifies for bonus depreciation in August 2017. He died at the end of November 2017. The asset was not sold before or after his death and will not be sold.

Bonus depreciation is disallowed if asset is disposed of in same year as purchased. Does the fact that the taxpayer died disallow the use of bonus depreciation?

It seems I can only find little references to death not being considered a disposition. I also can't find anything saying bonus depreciation is allowed in the year of death.

IRS Audit Tax Guide says this:
https://www.irs.gov/pub/irs-utl/farm...chapter_11.pdf page 63 of 65

"A transfer between spouses due to a divorce and a transfer by reason of the death of the farmer are not dispositions."

There are other similar references.

Thanks, for your help.

[Snaggletooth]

Don't know why not

dmj, I don't know why it wouldn't apply. I don't think transfer to an estate meets the definition of "disposal" - if that's what worries you.

[dmj4]

I think you are correct

Thank you for responding!

Yes, disposed of in the same year was my concern. There is not much on it out there. I was able to find these since first posting the question.

https://www.irs.gov/pub/irs-pdf/p544.pdf (Page 3 under transfer on death)

Transfer on death. The transfer of property of a decedent to an executor or administrator of the estate, or to the heirs or beneficiaries, is not a sale or exchange or other disposition. No taxable gain or deductible loss results from the transfer.

AND:

https://www.irs.gov/pub/irs-utl/farm...chapter_11.pdf (Page 63 of 65 the last sentence)

A transfer between spouses due to a divorce and a transfer by reason of the death of the farmer are not dispositions.