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Tax Law (Questions About Taxes)/Special Depreciation for Rental property

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Question
Hello,

My brother and I purchased a rental property this year.  Can my brother claim the property alone?  I don't need it since I have another.

Can Special depreciation be claimed or section 179?  The property was in October and we are looking to maximize on depreciation.

Since the property minus the land was 61900, using the MACRS this would allow for 61900/27.5 years, divided by 12 and then multiplied times 3.  Is this the correct calc, then would the special depreciation allow for an extra 50 percent of that?

Would love to be able to take the 25 from section 179.

Answer
Tehany,

Thanks for your question.

You must report your share on your return.  It has to do with the at-risk rules.  In other words, if he is not 100% at risk for loss of the property, he can't deduct 100% of the losses. Since you are a co-owner, he cannot be 100% at risk.

Sec 179 is not available for real property.  Bonus depreciation was not available for that either, but it has expired as of Dec 31, 2013 and is not available for any assets.

Since you can't take 179 or bonus depreciation that would be the correct calculation.

Hope this helps.

John Stancil, CPA  

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John Stancil, CPA

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I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I am Professor Emeritus at Florida Southern College. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a CPA practice, specializing in tax, for over 35 years. I am a member of the National Association of Tax Professionals, The Florida Insititute of CPA's, The NCPE Fellowship. In addition I am a Certified Mentor for SCORE. Visit my website at www.mybaldcpa.com. I also offer seminars and consultations to churches and clergy on their tax issues at www.churchtaxsolutions.com Also visit my blog, www.thetaxdocspot.com. I am listed on Tax Connections at https://www.taxconnections.com/profile/John-Stancil/12258973 Prepare and file your own taxes at www.1040stancilcpa.com

Experience

I hold a doctorate in Accounting, and am a CPA. My certifications of CIA, CFM, and CMA are inactive. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I have operated a CPA firm for over 37 years and have taught accounting and tax at the college level for over 35 years.

Organizations
FICPA, NATP, NCPE Fellowship, Lakeland Business Leaders

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The CPA Journal, Florida CPA Today, Green Consumer, Green Business, Global Sustainability as a Business Imperative, Palmetto Review, NATP TaxPro Quarterly, Mustang Journal of Finance and Accounting.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill University

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