AFTER BONUS DEPRECIATION
Last year I took 50% depreciation on vehicle. Will my cost basis this year be the original cost of the vehicle or less the 50% taken off last year? What goes on line 26d(4562) the original cost or 1/2 of it?
Thank you for your question regarding depreciation. I was able to consult with our tax expert and here is here is his response to your question:
What goes on Line 26 (d) of Form 4562 is the original cost of the vehicle. That’s the total cost, before any depreciation. On Line 26 (e), they write in the basis for the purposes of calculating depreciation: and this is the original cost multiplied by the business use percentage (that is, column c x column d) minus any bonus depreciation (which might be $8,000 if their car depreciation last year was the max of $11,160). This amount (reported in column e) is the figure used to calculate depreciation for the year.
We also recommend that you speak with a tax advisor who can actually look at your specific situation.
Best of luck,
Crystalynn Shelton, CPA
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