Depreciation of mechanic's tools

[Thetaxrookie23]

I have two questions that I would like some help with. I'm preparing a return for a self employed mechanic this year, who prepared his own return in 2006. He elected to take half of the tools he purchased in 2006 using the section 179 deduction. The rest of the basis, he took using the GDS 200DB over a 5 year recovery period. I believe that tools should be under a 7 year recovery period, or am I wrong? If I am right, How should I correct his depreciation deduction for this year?

Thanks

[veritas]

He is

correct.

5 years

[JG EA]

I thought tools were 7 years. Unless mechanics get a special rate like the construction trade does (see Class Life Tables in Pub 946). There does seem to be one Mechanical industry at 5 years in there. But it seems pretty specific.

[Jiggers]

Tools could be 5 or 7 years

See IRS Pub 946, Asset Class 57.0

Includes assets used in wholesale and retail trade, and personal and professional services.

5 Years.

In your tax practice do you depreciate desks 7 years or 5 years? 5 years would be correct.

[Thetaxrookie23]

Thanks for your help

I guess I didn't look far enough in Pub 946, or else I just missed it. I'll try to do my homework a little better next time. Thanks for your help.

[Jiggers]

No problem

I guess I didn't look far enough in Pub 946, or else I just missed it. I'll try to do my homework a little better next time. Thanks for your help.

I have been doing taxes for many, many years, and didn't know that. I picked that up in one seminar that I attended about 7 or 8 years ago.

[Gene V]

See IRS Pub 946, Asset Class 57.0

Includes assets used in wholesale and retail trade, and personal and professional services.

5 Years.

In your tax practice do you depreciate desks 7 years or 5 years? 5 years would be correct.

I alway considered my desk as office furniture and use 7 years. (TTB 9-1) Maybe I should start
using 5 years?

QF Depreciation Handbook.
Exceptions to Rev.Proc. 87-56
Class 57.0 Assets must be unique to the business activity to qualify for five year recovery life.

[JoshinNC]

I use 7 years for my desk

See IRS Pub 946, Asset Class 57.0

Includes assets used in wholesale and retail trade, and personal and professional services.

5 Years.

In your tax practice do you depreciate desks 7 years or 5 years? 5 years would be correct.

Where's this 5 year rule?

[veritas]

Office furniture is

7 years.........

[veritas]

Asset class 57.0

Where's this 5 year rule?

as Jiggers pointed out.

[JoshinNC]

I found it after I posted

as Jiggers pointed out.

although I have not investigated the definition of "professional or personal services" in the publication.

I expense all that stuff anyway, but it might help some of my clients.

[David1980]

Desks would still be 7-years.

A desk used in a tax office would be 7-year property.

Review the IRS Pub. 946 "How To Use the Tables" on page 97.

Table B-2 is only used if either the asset is not included in table B-1 or if the asset is specifically included in Table B-2 for that service.

In the case of a tax practice, the asset for a desk is found in 00.11 "office furniture". The service is 57.0, however does not specifically list office furniture or desks. Therefore, Table B-2 does not apply and you use the Table B-1 class life of 7 years.

Something not included in Table B-1 would use the asset class 57.0, for example a cash register.

See example #3 on the same page of IRS Pub. 946. The facts are almost identical to the tax practice desk situation.

[S T]

Well

Well it is no wonder everyone gets confused on what class life to use.

You would think a simple publication could make it simple stupid, so we would all know what class life to use, all explained in an easy to read chart!

I guess someone has to make a salary, fringe benefits and retirement benefits.

Sandy

[JG EA]

A desk used in a tax office would be 7-year property.

Review the IRS Pub. 946 "How To Use the Tables" on page 97.

Table B-2 is only used if either the asset is not included in table B-1 or if the asset is specifically included in Table B-2 for that service.

In the case of a tax practice, the asset for a desk is found in 00.11 "office furniture". The service is 57.0, however does not specifically list office furniture or desks. Therefore, Table B-2 does not apply and you use the Table B-1 class life of 7 years.

Something not included in Table B-1 would use the asset class 57.0, for example a cash register.

See example #3 on the same page of IRS Pub. 946. The facts are almost identical to the tax practice desk situation.

Good job! In explaining, and clarifying.

[Snaggletooth]

Tax Rookie

TaxRookie, welcome to this internet forum. If you are just starting, this is a good place to be. You posed an excellent question.

From a great part of the country also. If you are close to the U.P. of Michigan, this is one of the unique places in the United States.

Bring your questions (and answers) often. We have good people and occasionally, good fun too.

Ron Jordan, Manchester, TN