179 Deduction On Amended Return?

[JenMO]

Can I take a 179 deduction on an amended return. Taxpayer is just now doing 06 and we figured out that the trucks that are on deprec were sold in 05 and replaced in 05. Gain on the ones sold, and I wasn't sure I could take write off of some of the new truck to even out the taxes.
Also, I have a client that has not filed in 04 (05 or 06 either, but we have start somewhere). If he purchased equipment, what are my options on deprec? 179 deduction? MACRS, or do I have to do straight line only. What are other restrictions on filing past late returns? Any help would be appreciated.

[Luis Mopeo]

Check page 9-15 of TTB. The 179 election is made on Form 4562 by "...filing the form with an original tax return for the year the property was placed in service (whether or not the return is timely filed)...If a return was filed witout claiming a Section 179 deduction, the election may be made on an amended return."

Also, if you've taken depreciation on only one return, you are not considered to have adopted a method of accounting, and it can be changed on an amended return.

[erchess]

Wow

Luis I was told years ago that the 179 Election could be taken only on a timely filed original return. Was I misinformed or was there a change, and if there was a change, when did it occur?

[Gene V]

Luis I was told years ago that the 179 Election could be taken only on a timely filed original return. Was I misinformed or was there a change, and if there was a change, when did it occur?

I use to think the same thing, they must of change the law or my thinking was wrong.

TTB page 9-15

Section 179 Election / Revocation
The election to claim a Section 179 deduction is made by completing
Part I of Form 4562, Depreciation and Amortization, and filing
the form with an original tax return for the year the property
was placed in service (whether or not the return is timely filed).
If a return was filed without claiming a Section 179 deduction,
the election may be made on an amended return. The amended
return must specify the item of property to which the election
applies and the part of the cost of each item to be taken into
account.
Revocation. A Section 179 election can be revoked (or the selection
of qualifying property can be changed) by filing an amended
return. Approval from the IRS is not required to revoke the election.
However, once a Section 179 election has been revoked, the
revocation is final and the election cannot be reinstated.

[veritas]

More information

For property placed in service after 2002 and before 2011, a taxpayer can make or revoke the election to take a Section 179 deduction on an original or an amended return. Reg. Section 1.179-5(c). Any revocation, however, cannot be revoked. Code Section 179(c)(2). For earlier (and later) years, the election can be made on the taxpayer's first income tax return for the taxable year to which the election applies (whether or not the return is timely filed) or on an amended return, but can be revoked only with the IRS's consent. Reg. Section 1.179-5(a). In general, an amended return making the election (or revoking it for years after 2002 and before 2011) must be filed by the due date, including extensions. Reg. Sections 1.179-5(a), 1.179-5(c). However, if the taxpayer timely filed a return without making the election, the election can be made by filing an amended return within six months after the original due date, excluding extensions. Reg. Section 301.9100-2.

COMPLIANCE TIP: In this case, the taxpayer must write "Filed Pursuant to section 301.9100-2" on the top of the return. See Section 605.15 for further discussion of extensions of time to make elections.

[erchess]

Thank you Veritas

I do think that TTB should mention the part about the amended return needing to be filed by the due date or within six months after the due date including extensions.

[Luis Mopeo]

For property placed in service after 2002 and before 2011, a taxpayer can make or revoke the election to take a Section 179 deduction on an original or an amended return. Reg. Section 1.179-5(c). Any revocation, however, cannot be revoked. Code Section 179(c)(2). For earlier (and later) years, the election can be made on the taxpayer's first income tax return for the taxable year to which the election applies (whether or not the return is timely filed) or on an amended return, but can be revoked only with the IRS's consent. Reg. Section 1.179-5(a). In general, an amended return making the election (or revoking it for years after 2002 and before 2011) must be filed by the due date, including extensions. Reg. Sections 1.179-5(a), 1.179-5(c). However, if the taxpayer timely filed a return without making the election, the election can be made by filing an amended return within six months after the original due date, excluding extensions. Reg. Section 301.9100-2.

COMPLIANCE TIP: In this case, the taxpayer must write "Filed Pursuant to section 301.9100-2" on the top of the return. See Section 605.15 for further discussion of extensions of time to make elections.

Where did you get the info? I don't think it's correct.

Go to Example 1 under Reg. 1.179-5(c)(4).

2003, purchased and placed in service office furniture.

April 15, 2004, filed return claiming regular depreciation on the office furniture.

November, 2004, filed an amended return changing mind and claiming the section 179 expense for the office furniture.

I believe the information under Reg. 301.9100-2 may have applied before the new section 179 rules came into effect, but the new regs clearly show that the deduction can be claimed more than six months after the original due date.

[Snaggletoof]

Mistake

There is a blurb somewhere about making a mistake is an allowable reason to file an amended return.

In other words, if you bought 7-year MACRS, and it was really 10-year MACRS, you are allowed to file an amended return to correct this. However, by filing an amended return, you also are allowed to change all of your other depreciation elections.

Did I just dream this, or have I read it somewhere??

[veritas]

Where did you get the info? I don't think it's correct.

Go to Example 1 under Reg. 1.179-5(c)(4).

2003, purchased and placed in service office furniture.

April 15, 2004, filed return claiming regular depreciation on the office furniture.

November, 2004, filed an amended return changing mind and claiming the section 179 expense for the office furniture.

I believe the information under Reg. 301.9100-2 may have applied before the new section 179 rules came into effect, but the new regs clearly show that the deduction can be claimed more than six months after the original due date.

From Kleinrock's

I am thinking it is correct just poorly written. They tried to cover to much in one paragraph.

[veritas]

Luis I was told years ago that the 179 Election could be taken only on a timely filed original return. Was I misinformed or was there a change, and if there was a change, when did it occur?

I had a local instructor teach the same thing years ago. Fortunately I read the tax code and informed her she was mistaken.

[Luis Mopeo]

I had a local instructor teach the same thing years ago. Fortunately I read the tax code and informed her she was mistaken.

The rules changed in 2003. Before that the six-month deadline applied. For 2003 and after, you could claim the 179 on an amended.

[veritas]

Timely filed

The statement was the 179 election must be made on a timely filed return. In other words if you filed late the instructor said you could not claim Sec 179. That statement was incorrect. The election was available on the ORIGINAL return filed timely or not pre or post 2003.

[Bees Knees]

The new language in Reg. Sec. 1.179-5(c) says: "This amended return must be filed within the time prescribed by law for filing an amended return for such taxable year."

Any language found in the Section 179 regs that says the amended return must be filed by the due date of the return, plus extensions, is old language prior to the passage of the Jobs and Growth Tax Relief Reconciliation Act of 2003.

[Davc]

For property placed in service after 2002 and before 2011, a taxpayer can make or revoke the election to take a Section 179 deduction on an original or an amended return. Reg. Section 1.179-5(c).

How do you revoke an election on an original return?