Discussion:179 Depreciation

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Discussion Forum Index --> Tax Questions --> 179 Depreciation


Webbtax (talk|edits) said:

30 December 2005
Hello

I have a depreciation question, I have a client who owns a video game center. Can he expense the video games he purchased under section 179? He started his business in May of this year (2005), and purchased most of his equipment in June and so what depreciation table should I use for a short year?

WebbTax

GET (talk|edits) said:

30 December 2005
I think the video games are considered software and can be expensed fully expensed under 179 if it has a useful life of more than year. Someone can correct me if I'm wrong. I'm not sure how to calulate the depreciation for a short year. That's a good question I would like to know the answer to that also.

GET

Webbtax (talk|edits) said:

30 December 2005
Thanks Get for your help. Do anyone else have any suggestion on this? I really can use the help.

Mastill (talk|edits) said:

30 December 2005
He can 179 the video games and equipment. Depreciation would be figured as follows:


Basis * (1/useful life) * 2 * Months/12 = Depreciation

example 1,000 basis opened in may with 5 year depreciation

1,000 * 1/5 *2 * 8/12 = 267

Can't use tables in first year

Webbtax (talk|edits) said:

30 December 2005
Thanks Mastill, what about after the first year? can I use the table then?

Mastill (talk|edits) said:

30 December 2005
go to table after short year

Webbtax (talk|edits) said:

30 December 2005
Thank you Mastill you've been very helpful.

Riley (talk|edits) said:

31 December 2005
The software would be eligible for Sec. 179 if it is off-the-shelf software (not custom made).

Webbtax (talk|edits) said:

31 December 2005
Yes, it was purchased off the shelf.

GET (talk|edits) said:

31 December 2005
Good to know!!

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