Expert: John Kirk, CPA Date: 7/30/2008 Subject: unclaimed depreciation
Question started a landscaping business in 2000 as a self employed individual. i have never claimed any depreciation on any of my equipment purchases. i am now being audited for the years of 2005-06-07. auditor says unclaimed depreciation goes on 2005 return where it creates a nol and then should be carried forward to 2006. i would prefer to claim depreciation that was omitted in 2008. what is correct? do i have an option?
Answer You cannot claim depreciation generated in prior years on a future return, they must be claimed in the year generated. The depreciation for each year is claimed on the return for each year, not in 2005. If the depreciation causes a loss in 2005, you have the option to carry over the loss for 2005 into 2006 as a net operating loss, not as a carry forward of depreciation not taken.
