Brother-in-law is 1/3 owner in a blueberry harvester. He is not in any type of partnership with the other 2 owners (unless it's implied.) The others notified him that they sec. 179'd their shares in full. Does my b-i-l need to also fully sec. 179 his share? He doesn't need that big a loss on his Sch F and I worry about gain later on a sale since basis will then be $0.
Depreciation of 1/3 ownership asset
Apr 18, 2006
1 Replies
The best thing for your brother in law to do would be to form a partnership with the other owners. Having a 1/3 interest in a schedule F is a very fuzzy area of tax law and makes the accounting process a lot more complex than it needs to be. A partnership also protects his interest in the business in case something were to go sour.
To anwer your question about 179'ing the asset, he should be able to do what he wants with his portion. There is nothing that says you have to 179 the entire cost of the vehicle, you can 179 up to the entire cost. In this case, 2/3 of the vehicle would be 179'd and the other 1/3 would not.
Matt Harris, CPA
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