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April 11, 2018 at 4:19 am #182792
I have a few technical questions on how to appropriately complete line 26 of Form 4562 when making a Section 179 election for the full cost of the property.
First, I assume the election (i.e., what I put in column (i) in line 26 and then in line 29 – and then on line 7 of page 1) is limited to the cost of the property multiplied by my business use percentage, correct? I assume this must be the case, but I don’t see it spelled out in the instructions.
Second, in order to expense the full business cost (assuming the first point above is correct) and not depreciate any portion, do I simply put “0” in column (e) (Basis for depreciation) and column (h) (Depreciation Deduction)?
Last, can I then just leave column (f) (Recovery Period) and (g) (Method/Convention) blank or do I need to write in the period and method that I would be using if I weren’t expensing the full cost?
As an example, let’s say I am just listing one $1,000 computer on line 26 that I use for business 75% of the time. Would columns (c) through (i) be: (c) 75%; (d) $1000; (e) $750; (f) 5 years; (g) HY/200 DB; (h) $300 (i.e., year 1 depreciation); (i) $350 (i.e., year 2-5 depreciation expensed in year 1 under Section 179) OR (c) 75%; (d) $1000; (e) $0; (f) 5; (g) HY/200 DB; (h) $0; (i) $750.
Again, the results are the same – I am just trying to understand how it should appropriately be completed (I am not near any limitations under Section 179 – so whether Section 179 is $750 or $350 does not affect that).