last year I filed taxes with depreciation on real estate.Can I file this year without it ?made over 150k w/wif
Q. is it okay to file taxes without reporting depreciation on real estate we made more than 150k my acct. says we made too much so we dont get enough returns.without reporting real estate we got more money back because we paid alot in interest on our two houses one is a rental could I get audited?
Asked by phil p - Tue Mar 4 22:52:55 2008 - - 3 Answers - 1 Comments

A. Depreciation allowed or allowable is ALWAYS recaptured when you sell. If you are prevented from taking a loss in the current year due to your AGI or the passive activity loss limitations you will carry that forward to future years when your income declines OR claim it at sale time. Since the depreciation will be recaptured whether you took it or not, you should claim it every year. It will all work out in the end, but ONLY if you claim it every year.
Answered by Bostonian In MO - Wed Mar 5 06:29:31 2008

Cash flow is equal to earnings before taxes minus depreciation?
Q. Cash flow is equal to earnings before taxes minus depreciation 1) false 2) true
Asked by mary j - Thu Feb 5 13:21:44 2009 - - 1 Answers - 0 Comments

A. False - you add back depreciation to get cash flow since depreciation is a non cash expense. This is a bad finance question - to get cash flow just look on the cash flow statement
Answered by Jenna M - Thu Feb 5 23:09:22 2009

Can you claim property depreciation on your taxes?
Q. Hi, I paid $137,000 for my home in 2003 and it is now worth less than $120,000. I'm basically up a creek without a paddle because this was supposed to be a "starter home" and now i'll never be able to sell it, can you claim depreciation on your taxes?
Asked by Drew W - Thu Mar 15 11:20:08 2007 - - 6 Answers - 0 Comments

A. If you sell your personal home for less than you paid for it, you cannot deduct the loss. Losses on personal use property are never deductible, and depreciation is never allowed. Since you have not sold your home, you have no loss of any kind right now. Hopefully your home will increase in value, and you will continue to pay down the mortgage, so that at least your debt on the house will be covered when you do sell it.
Answered by ninasgramma - Thu Mar 15 11:32:21 2007

Can I Claim Home Depreciation on Taxes?
Q. I was told that I could claim the depreciation of my home's value on my 2008 taxes. My house is not used for business, just normal living use. Can I claim the depreciation, and if yes, how? I reside in Illinois if that helps. Thanks for any help you can provide.
Asked by Big Man - Fri Feb 6 12:55:33 2009 - - 3 Answers - 0 Comments

A. Dear Big: You may have an argument for your property value and your property tax assessment(state issue only), but not for the federal income tax. You can only claim depreciation on a rental property and that is on Sch. E. This advice was prepared based on our understanding of the tax law in effect at the time it was written as it applies to the facts that you provided. Click on my profile to read more. Errol Quinn Enrolled Agent Master Tax Advisor
Answered by hrblockerrolquinn - Fri Feb 6 13:27:21 2009

Can corporations that pay estimated taxes monthly deduct estimated depreciation expense monthly as well?
Q. Can corporations that pay estimated taxes monthly deduct estimated depreciation expense monthly as well?
Asked by mb - Sat Feb 3 16:41:05 2007 - - 1 Answers - 0 Comments

A. Paying estimated taxes is simply an advance installment type of plan for paying the amount of tax you expect to owe when you file your final return. In that sense, you would be calculating monthly depreciation expense into the amount you pay. You are not actually calculating the exact amount you owe on a monthly basis.
Answered by Brian G - Sat Feb 3 16:49:42 2007

How do you determine the depreciation of a home computer to use as a deduct. on your taxes?
Q. Also can you use tuition that you paid out of pocket as a deduction? If anyone knows any good websites to determine an estimated refund besides hrblock, let me know.
Asked by zujia - Sat Feb 2 19:51:30 2008 - - 3 Answers - 0 Comments

A. If the home computer was for personal use, it's not deductible. To deduct for business use, you need to use it >50% for business and be able to show why you had to have a computer at home. The tuition you paid for higher education may be used as either a tuition deduction or an education credit.
Answered by the tax lady - Sat Feb 2 19:57:58 2008

small business people excited about the new depreciation tax breaks?
Q. I'm totally ecstatic!! The government is sooo in tune with small business people!! Extra depreciation is sooo much better than eliminating anyone of the hundreds of unfair taxes levied against us!!! Why, here in CO you are actually taxed usage for giving something away free!!! But wow!!! Extra depreciation will save us during this recession!!!
Asked by EyeLuvSophie - Wed May 7 15:11:04 2008 - - 1 Answers - 0 Comments

A. First of all, you can't be in a recession if the GDP grows. Second of all, don't depend on the government to save your business.
Answered by avataz_99 - Wed May 7 16:21:34 2008

Expensing car and other personal effects to company...How do you get tax/depreciation benefits?
Q. Time and again my friends tell me that any big purchases I do I should expense it to my company. I'm a investor in a business and they say the company will save tax and get depreciation benefits. How does this work? Everybody says this in India but I really haven't understood this concept. Can somebody explain? Thanks
Asked by GC - Sat Feb 27 13:52:21 2010 - - 1 Answers - 0 Comments

A. Generally, businesses pay taxes on their NET profits. That is, the money left over after all business expenses (the costs of earning the income) are deducted. If you're purchasing a car and/or other assets (computer, copier, office furniture, etc.) used for business purposes, the cost of those assets is expensed to the business over time via depreciation based on the anticipated "useful life" of the asset. (For tax purposes, tax code spells out how the asset can be depreciated.) So the purchase of a car costing $15k with a useful life of 5 years = $3k per year in depreciation expense & reducing the NET income of the business by $3k. If the tax rate is 10%, that $3k equals about $300 in tax savings per year. At a tax rate of 20%, the… [cont.]
Answered by Robin D - Sat Feb 27 14:30:05 2010

I have 2 investment properties in Euclid, Ohio.How do I determine the basis and depreciation for tax purposes.
Q. I bought first property for $119,000 in September of 2005 and the second property for $127,000 in January of 2006. When I used tax filing software to do my taxes for 2005 and again for 2006,the software indicated that I had zero depreciation for both years.What am I doing wrong. It too late to do anything about last year taxes, but I have not filed my 2006 return as yet. I was told by people with investment propert that I could claim depreciation as soon as the houses became marketable.Is there a mistake that I made or is the mistake with the software?
Asked by moor questions - Tue Apr 10 01:22:42 2007 - - 2 Answers - 1 Comments

A. You must be doing something wrong with the software. Your basis is what you paid, plus the cost of any improvements. For depreciation purposes you must subtract the value of the land since land is never depreciated. You then divide the remaining basis by 27.5 to arrive at your annual depreciation amount. It's not too late to correct last year's return. File an amended return on Form 1040X to correct prior year returns.
Answered by Bostonian In MO - Tue Apr 10 01:42:57 2007

I filed my income taxes today, I think I got the question wrong about car depreciation,should I call the IRS?
Q. Or file an admendedment? I didnt understand the car depreciation question and I think I put in the wrong numbers...how do I handle this?
Asked by BB - Thu Apr 15 13:41:16 2010 - - 4 Answers - 0 Comments

A. I agree with the tax lady, with the added caveat that once you quantify what you did versus what you should have done, if the error involves only a few dollars, or relates to information rather than the specific amount of your liability, I wouldn't bother amending. Technically and legally, yes, you should amend. But some of us live in the real world and with the IRS it is real easy to spend $500 of effort to correct a $10 problem.
Answered by Carl F - Thu Apr 15 13:52:53 2010

Timing on Section 179 Asset Depreciation - Taxes?
Q. Do I have to take the section 179 asset deduction in the year the asset was purchased or can I take it in the first year the asset was placed in use? I purchased the equipment at the end of the calendar year but didnt use it until 3 months later in the next year. Thanks
Asked by Jordan - Thu Dec 31 12:38:29 2009 - - 4 Answers - 0 Comments

A. You get the deduction in the year that the asset was "placed into service"! For example... You buy a computer from a dealer and paid it (credit card) on Dec. 15 but it had to be custom made and wasn't available until Dec. 31. You can't deduct it until the current year! I never mentioned that you used it for business but just picked it up on Dec. 31. Using the same fact pattern above, you then use it on Jan 2. The second example was when you used the asset for your business not when you picked it up! Year 2 is when you get the deduction.
Answered by MrMojo1 - Thu Dec 31 22:19:19 2009

If I sell a rental property and there's no profit do I have to pay taxes on the depreciation?
Q. I purchased the house in 2004 and my mother lived there but never paid any rent. She is now in a nursing home and I need to sell it. Due to the market, I will need to rent it until I can sell it. I paid $305k for it and I owe $275k on the mortgage. Currently, houses in the area are going for $225k to $250K. I'm hoping to sell in in a year or two for about $280k and break even. Will I be subject to any capital gains or will I have to pay taxes on depreciation?
Asked by Annc - Sun Aug 23 17:47:30 2009 - - 3 Answers - 0 Comments

A. If you have taken depreciation on this property, the depreciated value now becomes your cost basis. Therefore, any price that you realize over and above your new depreciated value is subject to a capital gains tax. As an example, you purchased this property several years ago at a cost of $500,000.00 and you have taken $100,000.00 in depreciation, your cost basis is now $400,000.00; not the original purchase price of $500,000.00. Therefore, if you sell it at, let's say, at $500,000.00 which is equivalent to your original purchase price, you now have a $100,000.00 capital gain because of the depreciation that you have taken. This is called, "Depreciation Recapture."
Answered by RUSerious - Sun Aug 23 18:14:18 2009

Eligible depreciation tax deductions on used equipment?
Q. I purchased some used equipment (cement mixer, post hole digger) at the beginning of 2009. Does equipment have to be new, or can it be used, in order for me to get a depreciation tax deduction when i file in 2010? Also, does the equipment have to be purchased from a dealer or can it be purchased from a friend in order to be eligible for a deduction? Thanks.
Asked by Adam C - Sun May 17 19:25:27 2009 - - 1 Answers - 0 Comments

A. It need not be new and can be purchased anywhere. Just be sure you have proof of payment and a bill of sale.
Answered by Sharon T - Sun May 17 22:30:06 2009

Are there any options to calculate tax depreciation on assets acquired in like kind exchanges?
Q. Are there any options to calculate tax depreciation on assets acquired in like kind exchanges?
Asked by Malcolm K - Fri Jun 8 15:53:03 2007 - - 2 Answers - 0 Comments

A. Yes, there is an election to treat the property as a disposition rather than an exchange. This is explained in IRS Publication 946. It's too involved to explain here, (at least I can't do it, maybe another answerer can do it in one or two paragraphs). Seek professional advice if you plan this election. Here is the publication:
Answered by ninasgramma - Fri Jun 8 16:56:45 2007

Taxes and depreciation of real estate.?
Q. What does the IRS do if you accidentally flip flop on the method you use to depreciate your properties from year to year? Yes to the question below...
Asked by gypsyecsa - Wed Oct 1 23:04:02 2008 - - 2 Answers - 0 Comments

Taxes if taking back rental property and selling after 2 years?
Q. I have had a rental property for a few years. If I took it back and lived in it for 2 years, and then sold it, would I owe any taxes on the gain prior to taking it back? or any taxes on the depreciation I took while it was a rental property?
Asked by Barnie - Mon Oct 19 12:05:53 2009 - - 4 Answers - 0 Comments

A. the rules for this issue changed in 2008. Therefore the answer would be greatly different depending on when you began to live in the property as your primary home. If you are going to do this after 2008 you will only get a prorated exemption and in either case must adjust the basis for the depreciation you took when you were renting it out. If you have not sold the property yet do not do so until you have talked to a tax professional regarding the best way to handle this transaction.
Answered by Mathew - Mon Oct 19 12:30:10 2009

How does depreciation create deferred tax asset?
Q. I thought depreciation only creates deferred tax liability but want to know how it creates deferred tax asset? One Explain would be great? Thank You Also how does sale of an asset create deferred tax asset? Please explain in very terms? My accounting is not very strong Thank You
Asked by jackie_vora - Sun Feb 25 18:25:18 2007 - - 1 Answers - 0 Comments

A. Whether something creates a tax asset or liability is purely based on timing. If the tax benefit is taken faster than for book, you have a future tax liability. The opposite is true for creating a deferred tax asset. To answer your question on depreciation, it is possible. Buildings are usually computed on the straight tline method for both book and tax, but using different estimated lives. In some cases, you might choose a shorter useful life than tax (say 25 years as opposed to the 39 tax year life). In that example, you'd be building a deferred tax asset gradually until the 25th year.
Answered by Molly - Sun Feb 25 20:32:16 2007

If there aren't enough lines on a tax form depreciation sheet for all my items what do I do?
Q. I'm filling out IRS form 4562, part V, section A, line 26. There isn't enough space for all the items I need to include. Do I add another sheet with a table with the additional items?
Asked by kirsty m - Sun Feb 10 17:21:50 2008 - - 3 Answers - 0 Comments

A. You can make a spreadsheet on excel as botygy mentioned, but if you don't happen to know how, or you don't have excel on your computer, go to and read the information there for the form, part, section and number you need. You may not need to list each item individually. I have included a link below for the instruction for this form, plus a downloadable form so you can make additional copies if needed. Page 8 of the instruction manual refers to this form, part V, section A, Line 26... This may help.. but if it doesn't at least you can duplicate the form here without having to go anywhere. If all else fails, hilite the section on the form, and copy it by holding ctrl c then paste it in a blank document to reproduce it...
Answered by PoeticMistress - Sun Feb 10 17:43:35 2008

Unauthorized change to method of accounting question for rental property depreciation.?
Q. I have a piece of property I have owned since 2003. I have not been claiming depreciation. I want to begin to do so. If I just start claiming depreciation on my taxes is this considered an unauthorized change in my method of accounting? It was placed into service in 2003- I just never claimed depreciation.
Asked by saltoftheearth15 - Fri Mar 7 00:12:49 2008 - - 2 Answers - 0 Comments

A. if you have been renting your property since 2003 then you must start depreciation in 2003. Therefore you must amend your prior years returns to reflect the depreciation in each subsequent years. If you finally put your property into service and rented it out in 2007 then you can start depreciating in 2007. This would not be considered an unauthorized change in accounting method. depreciation doesn't have anything to do with accounting method. talk to your local hrblock office . they don't charge for advice.
Answered by Codys mom - Fri Mar 7 00:20:47 2008

What is the difference between Accounting Depreciation & Tax Depreciation?
Q. What is the difference between Accounting Depreciation & Tax Depreciation?
Asked by rehanspk - Wed Nov 29 05:05:52 2006 - - 2 Answers - 0 Comments

A. Accounting depreciation is the method used by a company in preparing its financial statements. Tax depreciation is the method used in preparing the company's tax returns (both Federal and state). The theoretical purpose of accounting depreciation is to spread the cost of a fixed asset over its useful life. Depreciation methods include straight-line and accelerated. For tax purposes, an acquired fixed asset having a life greater than one year is allowed to be deducted over a time period approved by the government. This time frame may not bear any resemblance to the actual life of the asset acquired. Tax policy is modified from time-to-time to achieve certain ends, (such as to promote investment in fixed assets) and things such as bonus… [cont.]
Answered by Andreas - Wed Nov 29 10:09:19 2006