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Is the depreciation of certain assets the same in 2018 for self-employed businesses or is that changing?

Forum|Forum|7 years ago
June 1, 2019
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Just wondering if the depreciation of certain assets changes or goes away for 2018 and on.

TurboTax Self Employed Online

Best answer by Rick19744

Carl I am going to have to disagree with your statement. There are significant changes to the depreciation rules for tax years beginning after 2017. Now whether all or any of them apply to this particular individual, well we just don't have those facts.

Changes / streamlined depreciation for qualified improvement property
Changed the ADS life of residential and non residential property. There was an ADS change for qualified improvement property. Now this may not impact this individual, but the change in ADS life can impact those that may be subject to the new "net interest expense" limitation.
The new law provides for 100% expensing of certain assets. Bonus depreciation change was effective for assets placed in service after 9/27/2017. There are still certain restrictions here for some property that is required to use the ADS method. The interplay of the new "net interest expense" limitation comes into play with these rules as well.
Change in bonus in that the asset is no longer required to be new to be eligible for 100% expensing. Used property will now qualify as long as it is the taxpayer's first use of the property.
Increased annual depreciation limits on passenger autos. This can be somewhat tricky as there is the acceleration but then a moratorium in following years. Timing issue really.
Increase in Section 179 limitation to $1 mil subject to the phase-out rules.
There have been changes to leasehold improvements that could now qualify for Section 179.

Carl11_2

Employee

Nothing changes for depreciation, and nothing changes on the qualified mortgage interest deduction for a business asset (such as rental property).

Rick19744Answer

Employee

Carl I am going to have to disagree with your statement. There are significant changes to the depreciation rules for tax years beginning after 2017. Now whether all or any of them apply to this particular individual, well we just don't have those facts.

Changes / streamlined depreciation for qualified improvement property
Changed the ADS life of residential and non residential property. There was an ADS change for qualified improvement property. Now this may not impact this individual, but the change in ADS life can impact those that may be subject to the new "net interest expense" limitation.
The new law provides for 100% expensing of certain assets. Bonus depreciation change was effective for assets placed in service after 9/27/2017. There are still certain restrictions here for some property that is required to use the ADS method. The interplay of the new "net interest expense" limitation comes into play with these rules as well.
Change in bonus in that the asset is no longer required to be new to be eligible for 100% expensing. Used property will now qualify as long as it is the taxpayer's first use of the property.
Increased annual depreciation limits on passenger autos. This can be somewhat tricky as there is the acceleration but then a moratorium in following years. Timing issue really.
Increase in Section 179 limitation to $1 mil subject to the phase-out rules.
There have been changes to leasehold improvements that could now qualify for Section 179.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

Carl11_2

Employee

Thanks RIck. I realized earlier today that my PDF copy of the "new" tax laws isn't what I thought it was. It gives me republican version, democrat version, senate version and house version. I now realize I've wasted days reading it. Do you or anyone else reading this have a link to the PDF file of the "passed" law without all that extraneous non-relevant garbage in it?