SL using GDS and SL using ADS

Apr 17, 2008 3 Replies

Where can I find the tables for SL using GDS and SL using ADS (that are referred ton page 38 of publication 946)? If you have 5 year property and take 20% a year for 5 years, what method is that? If you take 10% in 1st and 6th year, and 20% in the other 4 years, then what method is that?



Do you have to use the half year convention, or can you use choose between half -year and mid-quarter?



Can you elect SL using either GDS or ADS, and can you elect not to use Section 179? If you do this, then will the AMT adjustment to depreciation be zero? And will the California depreciation (which I think does not allow very rapid depreciation -- see quote below) be the same as federal?


Other consistent methods. Other depreciation methods may be used as long as the total accumulated depreciation at the end of any taxable year during the first 2/3 of the useful life of the property is not more than the amount that would have resulted from using the declining balance method.


wrote

Straight line.

Straight line.

Now ask about the convention.

The second example is a mid-year convention.

What convention you can use - or in some cases have to use - will depend on when the assets are placed in service.

You elect TO use Section 179, not the other way around.

Is one GDS and the other ADS? What I want to know is the difference between straight line GDS and straight line ADS.

If you placed a printer into service on March 1, what convention would that be? Seems like it would be half-year because the 40% rule is not met. But if in the last 3 months of the year you put another printer (of the same price) into service, then one would use the mid-quarter convention for both printers with a different quarter for each. Is that correct? That's a pretty confusing rule. What happens if one uses mid-quarter for everything?

What about electing ADS? What I wondering is that AMT and Califirnia return may be simpler if you use the slower method.

snipped-for-privacy@yahoo.com wrote: [...]

Yes, if those were your only assets placed into service in the current year. You met the 40% test.

You think that is confusing? Suppose you have a short tax year, such as an S-corp that begins operation on Sept. 1st. If you put 40% or more of your acquired assets for the year into service on Oct 1st, you must use the MQ convention because you met the last-three-months-of-the-calendar-year test, even though it was only the second quarter of your short tax year.

AFAIK, the IRS never (normally) gets a copy of depreciation worksheets, only the annual depreciation expense amount from form 4562.

-Mark Bole

Join the Discussion

Have something to add? Share your thoughts — no account required.

Didn't find your answer?

Ask the community — no account required