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SL using GDS and SL using ADS removeps-groups@yahoo.com 04-17-2008
Posted by removeps-groups@yahoo.com on April 17, 2008, 3:34 pm
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 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?

<Quote source="http://ftb.ca.gov/forms/07_forms/07_3885.pdf">

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.

</Quote>

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Posted by Paul Thomas, CPA on April 17, 2008, 5:17 pm
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> 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?


Straight line.



> If you take 10% in 1st and 6th year, and 20% in the
> other 4 years, then what method is that?



Straight line.



Now ask about the convention.


The second example is a mid-year convention.




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



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




> Can you elect SL using either GDS or ADS,
> and can you elect not to use Section 179?



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





--
Paul A. Thomas, CPA
Athens, Georgia

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
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Posted by removeps-groups@yahoo.com on April 17, 2008, 8:35 pm
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wrote:

> > If you have 5 year
> > property and take 20% a year for 5 years, what method is that?
>
> Straight line.
>
> > If you take 10% in 1st and 6th year, and 20% in the
> > other 4 years, then what method is that?
>
> Straight line.

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


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

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?

> > Can you elect SL using either GDS or ADS,
> > and can you elect not to use Section 179?
>
> You elect TO use Section 179, not the other way around.

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

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>

Posted by Mark Bole on April 17, 2008, 10:23 pm
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removeps-groups@yahoo.com wrote:
[...]
> 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?

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

> That's a pretty confusing rule. What happens if one
> uses mid-quarter for everything?

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

--
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2007) - All rights reserved. >>
<< ------------------------------------------------------- >>


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