Covers recent changes to the Section 179 depreciation rules, bonus depreciation, depreciation recapture, and The American Tax Relief Act of 2012.
Depreciation represents an annual income tax deduction that allows for recovery of the cost or other basis of certain property over time. It is an allowance for the wear and tear, age, deterioration, or obsolescence of the property. Depreciation, Amortization, and Property Transfers: Issues and Strategies provides an in-depth analysis of the complex maze of rules addressing depreciation, amortization, and the sale of property, with an emphasis on identifying unique planning opportunities and pitfalls. It covers critical areas including cost segregation, repairs, capital expenditures, and investor real estate holdings.
Recent changes to Section 179 and “bonus” depreciation make understanding the issues and planning for depreciation deductions more important now than ever!
Major topics covered include:
Recent cases and rulings involving depreciation and amortization issues and how they impact clients, along with useful planning opportunities
Correctly handling depreciation on purchases and trade-ins of business vehicles
Using cost segregation studies to dramatically enhance write-offs
AMT depreciation adjustments and how to avoid them
Accounting for a change in use in the asset
Detailed coverage of the greatly increased §179 expense election and how to maximize its use; when to use it; what properties qualify
How to calculate depreciation in a short tax year and upon the start-up of a business
Understanding §197 amortization issues; how to handle software and website costs
Correctly handling depreciation write-offs for retail, restaurant and personal service industries; recent tax law changes in the area of "distributive trades and services"
Sale of property and the depreciation recapture rules (§§1245, 1250, unrecognized §1250 gain for real estate, §291); goodwill write-offs need to be recaptured
Capitalizing "repairs" or writing them off immediately
Small Business Jobs Act Changes to §179 and Bonus Depreciation
§179 versus §1245 Recapture
§168(i)(7) and Tax-deferred Exchanges
Capitalization Change in Accounting Method (CAM)
IRS Issues Industry Directives on Repairs versus Capitalization
§179 Carryover Not Used Upon Death of the Taxpayer
5- or 7-Year MACRS Property vs. 15-Year Land Improvements
§179 Carryover When Proprietorship Converts to LLC
Accounting Method Request Form 3115 Revised (Ann. 2010-32)
Unrecaptured §1250 Gain Treatment
Classification of Mixed-Use Structures
MACRS 27.5-Year Classification
Also covers advanced depreciation issues, including corporate liquidations, §754 basis adjustments, transfers to/from trusts, tax-deferred exchanges, personal property converted to business property, and more.
As a CPA in industry or public practice, you need a thorough grasp of this important area of tax law. Written in a very practical format, this guide includes many examples and charts to illustrate how to maximize tax savings for your company or your clients.
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