Two Depreciation Questions - Did you purchase this asset new? and Special Depreciation Allowance

dcshcultz75

I am now entering my Depreciable Assets into FreeTaxUSA file for 2018. I transferred my 2017 Turbo Tax file into FreeTaxUSA. No problem, everything seemed to transfer fine except Depreciable Assets on my Rental Property (Schedule C). No assets came in from the TurboTax pdf file?? Not sure why, but no problem as I have the Depreciable Assets form from Turbo Tax on paper. I am entering those assets into FreeTaxUSA. When it asks me: Did you purchase this asset new? how do I answer that.. Yes or No.?? To me, if I bought a used mower from someone for the rentals, I would answer… no not new, its used to me… Or… do I answer YES for a used piece of equipment because it is NEW to me and my rental property?? Another example… if I put $5,000 into an improvement - remodel a room in the rental unit, with various used lumber, materials, etc. Do I answer Yes or No? YES, it is a new asset or No, because I used some old lumber to remodel?

Second question, how do I enter those assets that had a first year, Special Depreciation Allowance of a certain dollar amount in the first year, which is/was depreciated for a number of years already…? As always.. thanks for your excellent help!! Liking FreeTaxUSA!

CoryF

Thank you for joining our community, Dcschultz75.

You need to answer Yes to these questions since the assets are New to you. For certain assets, the new designation allows you to pick from Special Depreciation types in the first year like Bonus Depreciation (applies only for the first year the property is placed in service) and Section 179 expense.

For the Second Question, the subsequent pages in the Depreciable assets screens will ask if you applied the special depreciation allowance allowed in the first year of in-service (bonus depreciation) and ask for the amount used.