File your Taxes for Free!
  • Get your maximum refund*
  • 100% accurate calculations guaranteed*

TurboTax Federal Free Edition - File Taxes Online

Don't let filing your taxes get you down! We'll help make it as easy as possible. With e-file and direct deposit, there's no faster way to get your refund!

Approved TurboTax Affiliate Site. TurboTax and TurboTax Online, among others, are registered trademarks and/or service marks of Intuit Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.


© 2012 - 2018 All rights reserved.

This is an Approved TurboTax Affiliate site. TurboTax and TurboTax Online, among other are registered trademarks and/or service marks of Intuit, Inc. in the United States and other countries. Other parties' trademarks or service marks are the property of the respective owners.
When discussing "Free e-file", note that state e-file is an additional fee. E-file fees do not apply to New York state returns. Prices are subject to change without notice. E-file and get your refund faster
*If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
*Maximum Refund Guarantee - or Your Money Back: If you get a larger refund or smaller tax due from another tax preparation method, we'll refund the applicable TurboTax federal and/or state purchase price paid. TurboTax Federal Free Edition customers are entitled to payment of $14.99 and a refund of your state purchase price paid. Claims must be submitted within sixty (60) days of your TurboTax filing date and no later than 6/15/14. E-file, Audit Defense, Professional Review, Refund Transfer and technical support fees are excluded. This guarantee cannot be combined with the TurboTax Satisfaction (Easy) Guarantee. *We're so confident your return will be done right, we guarantee it. Accurate calculations guaranteed. If you pay an IRS or state penalty or interest because of a TurboTax calculations error, we'll pay you the penalty and interest.
https://turbotax.intuit.com/corp/guarantees.jsp

2010 Turbotax

File 2010 Taxes Online FreeTax Filing Extension Deadline 2012State Income TaxTaxes For 2010Internal Revenue Service Form 1040ez2012 Turbotax Free1040 ComFree State And Federal Tax Filing For Low IncomeTax For 20121040nr Instructions 2012Income Tax For UnemployedMypay GovRevise Tax Return1041ezFree Tax SoftwareStudents And Tax ReturnsH And R Block E FileWww Taxes Hrblock ComFederal Tax Form 1040aI Need To File My 2012 TaxesHow To Fill Out 1040xTax Compliance SoftwareHrblockfreeHow To Amend 2012 Tax ReturnFederal Income Tax Rates 2012Hr Block E FileIrs Amended ReturnForm 1040x FillableFree Federal And State Tax Filing 2014Internal Revenue Tax Forms 2010Free Tax Filing Online StateExpress 1040File Your State Taxes Free2012 1040ez Tax FormHr Block Online Free Tax FilingFile 1040x TurbotaxFile Back Taxes OnlineAmend Your Tax ReturnFile State Taxes Only Online FreeH&r Block 2011 Tax Software Download

2010 Turbotax

2010 turbotax 5. 2010 turbotax   How To Get Tax Help Table of Contents Go online, use a smart phone, call or walk in to an office near you. 2010 turbotax Whether it's help with a tax issue, preparing your tax return or picking up a free publication or form, get the help you need the way you want it. 2010 turbotax Free help with your tax return. 2010 turbotax    Free help in preparing your return is available nationwide from IRS-certified volunteers. 2010 turbotax The Volunteer Income Tax Assistance (VITA) program is designed to help low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers. 2010 turbotax The Tax Counseling for the Elderly (TCE) program is designed to assist taxpayers age 60 and older with their tax returns. 2010 turbotax Most VITA and TCE sites offer free electronic filing and all volunteers will let you know about credits and deductions you may be entitled to claim. 2010 turbotax Some VITA and TCE sites provide taxpayers the opportunity to prepare their return with the assistance of an IRS-certified volunteer. 2010 turbotax To find the nearest VITA or TCE site, visit IRS. 2010 turbotax gov or call 1-800-906-9887. 2010 turbotax   As part of the TCE program, AARP offers the Tax-Aide counseling program. 2010 turbotax To find the nearest AARP Tax-Aide site, visit AARP's website at www. 2010 turbotax aarp. 2010 turbotax org/money/taxaide or call 1-888-227-7669. 2010 turbotax   For more information on these programs, go to IRS. 2010 turbotax gov and enter “VITA” in the search box. 2010 turbotax Internet. 2010 turbotax IRS. 2010 turbotax gov and IRS2Go are ready when you are — every day, every night, 24 hours a day, 7 days a week. 2010 turbotax Apply for an Employer Identification Number (EIN). 2010 turbotax Go to IRS. 2010 turbotax gov and enter Apply for an EIN in the search box. 2010 turbotax Request an Electronic Filing PIN by going to IRS. 2010 turbotax gov and entering Electronic Filing PIN in the search box. 2010 turbotax Check the status of your 2013 refund with Where's My Refund? Go to IRS. 2010 turbotax gov or the IRS2Go app, and click on Where's My Refund? You'll get a personalized refund date as soon as the IRS processes your tax return and approves your refund. 2010 turbotax If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 2010 turbotax Check the status of your amended return. 2010 turbotax Go to IRS. 2010 turbotax gov and enter Where's My Amended Return in the search box. 2010 turbotax Download forms, instructions, and publications, including some accessible versions. 2010 turbotax Order free transcripts of your tax returns or tax account using the Order a Transcript tool on IRS. 2010 turbotax gov or IRS2Go. 2010 turbotax Tax return and tax account transcripts are generally available for the current year and past three years. 2010 turbotax Figure your income tax withholding with the IRS Withholding Calculator on IRS. 2010 turbotax gov. 2010 turbotax Use it if you've had too much or too little withheld, your personal situation has changed, you're starting a new job or you just want to see if you're having the right amount withheld. 2010 turbotax Determine if you might be subject to the Alternative Minimum Tax by using the Alternative Minimum Tax Assistant on IRS. 2010 turbotax gov. 2010 turbotax Locate the nearest Taxpayer Assistance Center using the Office Locator tool on IRS. 2010 turbotax gov or IRS2Go. 2010 turbotax Stop by most business days for face-to-face tax help, no appointment necessary — just walk in. 2010 turbotax An employee can explain IRS letters, request adjustments to your tax account or help you set up a payment plan. 2010 turbotax Before you visit, check the Office Locator for the address, phone number, hours of operation and the services provided. 2010 turbotax If you have an ongoing tax account problem or a special need, such as a disability, you can request an appointment. 2010 turbotax Call the local number listed in the Office Locator, or look in the phone book under United States Government, Internal Revenue Service. 2010 turbotax Locate the nearest volunteer help site with the VITA Locator Tool on IRS. 2010 turbotax gov. 2010 turbotax Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 2010 turbotax The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. 2010 turbotax Most VITA and TCE sites offer free electronic filing and some provide IRS-certified volunteers who can help prepare your tax return. 2010 turbotax AARP offers the Tax-Aide counseling program as part of the TCE program. 2010 turbotax Visit AARP's website to find the nearest Tax-Aide location. 2010 turbotax Research your tax questions. 2010 turbotax Search publications and instructions by topic or keyword. 2010 turbotax Read the Internal Revenue Code, regulations, or other official guidance. 2010 turbotax Read Internal Revenue Bulletins. 2010 turbotax Sign up to receive local and national tax news by email. 2010 turbotax Phone. 2010 turbotax You can call the IRS, or you can carry it in your pocket with the IRS2Go app on your smart phone or tablet. 2010 turbotax Download the free IRS2Go mobile app from the iTunes app store or from Google Play. 2010 turbotax Use it to watch the IRS YouTube channel, get IRS news as soon as it's released to the public, order transcripts of your tax returns or tax account, check your refund status, subscribe to filing season updates or daily tax tips, and follow the IRS Twitter news feed, @IRSnews, to get the latest federal tax news, including information about tax law changes and important IRS programs. 2010 turbotax Call to locate the nearest volunteer help site, 1-800-906-9887. 2010 turbotax Low-to-moderate income, elderly, persons with disabilities, and limited English proficient taxpayers can get free help with their tax return from the nationwide Volunteer Income Tax Assistance (VITA) program. 2010 turbotax The Tax Counseling for the Elderly (TCE) program helps taxpayers 60 and older with their tax returns. 2010 turbotax Most VITA and TCE sites offer free electronic filing. 2010 turbotax Some VITA and TCE sites provide IRS-certified volunteers who can help prepare your tax return. 2010 turbotax Through the TCE program, AARP offers the Tax-Aide counseling program; call 1-888-227-7669 to find the nearest Tax-Aide location. 2010 turbotax Call to check the status of your 2013 refund, 1-800-829-1954 or 1-800-829-4477. 2010 turbotax The automated Where's My Refund? information is available 24 hours a day, 7 days a week. 2010 turbotax If you e-file, your refund status is usually available within 24 hours after the IRS receives your tax return or 4 weeks after you've mailed a paper return. 2010 turbotax Before you call, have your 2013 tax return handy so you can provide your social security number, your filing status, and the exact whole dollar amount of your refund. 2010 turbotax Where's My Refund? can give you a personalized refund date as soon as the IRS processes your tax return and approves your refund. 2010 turbotax Where's My Refund? includes information for the most recent return filed in the current year and does not include information about amended returns. 2010 turbotax Call the Amended Return Hotline, 1-866-464-2050, to check the status of your amended return. 2010 turbotax Call to order forms, instructions and publications, 1-800-TAX-FORM (1-800-829-3676) to order current-year forms, instructions and publications, and prior-year forms and instructions (limited to 5 years). 2010 turbotax You should receive your order within 10 business days. 2010 turbotax Call to order transcripts of your tax returns or tax account, 1-800-908-9946. 2010 turbotax Follow the prompts to provide your Social Security Number or Individual Taxpayer Identification Number, date of birth, street address and ZIP code. 2010 turbotax Call for TeleTax topics, 1-800-829-4477, to listen to pre-recorded messages covering various tax topics. 2010 turbotax Call to ask tax questions, 1-800-829-1040. 2010 turbotax Call using TTY/TDD equipment, 1-800-829-4059 to ask tax questions or order forms and publications. 2010 turbotax The TTY/TDD telephone number is for people who are deaf, hard of hearing, or have a speech disability. 2010 turbotax These individuals can also contact the IRS through relay services such as the Federal Relay Service available at www. 2010 turbotax gsa. 2010 turbotax gov/fedrelay. 2010 turbotax Walk-in. 2010 turbotax You can find a selection of forms, publications and services — in-person, face-to-face. 2010 turbotax Products. 2010 turbotax You can walk in to some post offices, libraries, and IRS offices to pick up certain forms, instructions, and publications. 2010 turbotax Some IRS offices, libraries, and city and county government offices have a collection of products available to photocopy from reproducible proofs. 2010 turbotax Services. 2010 turbotax You can walk in to your local TAC most business days for personal, face-to-face tax help. 2010 turbotax An employee can explain IRS letters, request adjustments to your tax account, or help you set up a payment plan. 2010 turbotax If you need to resolve a tax problem, have questions about how the tax law applies to your individual tax return, or you are more comfortable talking with someone in person, visit your local TAC where you can talk with an IRS representative face-to-face. 2010 turbotax No appointment is necessary—just walk in. 2010 turbotax Before visiting, check www. 2010 turbotax irs. 2010 turbotax gov/localcontacts for hours of operation and services provided. 2010 turbotax Mail. 2010 turbotax You can send your order for forms, instructions, and publications to the address below. 2010 turbotax You should receive a response within 10 business days after your request is received. 2010 turbotax  Internal Revenue Service 1201 N. 2010 turbotax Mitsubishi Motorway Bloomington, IL 61705-6613 The Taxpayer Advocate Service Is Here to Help You. 2010 turbotax    The Taxpayer Advocate Service (TAS) is your voice at the IRS. 2010 turbotax Our job is to ensure that every taxpayer is treated fairly and that you know and understand your rights. 2010 turbotax What can TAS do for you?    We can offer you free help with IRS problems that you can't resolve on your own. 2010 turbotax We know this process can be confusing, but the worst thing you can do is nothing at all! TAS can help if you can't resolve your tax problem and: Your problem is causing financial difficulties for you, your family, or your business. 2010 turbotax You face (or your business is facing) an immediate threat of adverse action. 2010 turbotax You've tried repeatedly to contact the IRS but no one has responded, or the IRS hasn't responded by the date promised. 2010 turbotax   If you qualify for our help, you'll be assigned to one advocate who'll be with you at every turn and will do everything possible to resolve your problem. 2010 turbotax Here's why we can help: TAS is an independent organization within the IRS. 2010 turbotax Our advocates know how to work with the IRS. 2010 turbotax Our services are free and tailored to meet your needs. 2010 turbotax We have offices in every state, the District of Columbia, and Puerto Rico. 2010 turbotax How can you reach us?    If you think TAS can help you, call your local advocate, whose number is in your local directory and at www. 2010 turbotax irs. 2010 turbotax gov/advocate, or call us toll-free at 1-877-777-4778. 2010 turbotax How else does TAS help taxpayers?    TAS also works to resolve large-scale, systemic problems that affect many taxpayers. 2010 turbotax If you know of one of these broad issues, please report it to us through our Systemic Advocacy Management System at www. 2010 turbotax irs. 2010 turbotax gov/sams. 2010 turbotax Low Income Taxpayer Clinics. 2010 turbotax    Low Income Taxpayer Clinics (LITCs) serve individuals whose income is below a certain level and need to resolve tax problems such as audits, appeals, and tax collection disputes. 2010 turbotax Some clinics can provide information about taxpayer rights and responsibilities in different languages for individuals who speak English as a second language. 2010 turbotax Visit www. 2010 turbotax TaxpayerAdvocate. 2010 turbotax irs. 2010 turbotax gov or see IRS Publication 4134, Low Income Taxpayer Clinic List. 2010 turbotax Prev  Up  Next   Home   More Online Publications
Español



Microsoft Windows Media
(22 MB)

The 2010 Turbotax

2010 turbotax 7. 2010 turbotax   Depreciation, Depletion, and Amortization Table of Contents What's New for 2013 Introduction Topics - This chapter discusses: Useful Items - You may want to see: Overview of DepreciationWhat Property Can Be Depreciated? What Property Cannot Be Depreciated? When Does Depreciation Begin and End? Can You Use MACRS To Depreciate Your Property? What Is the Basis of Your Depreciable Property? How Do You Treat Repairs and Improvements? Do You Have To File Form 4562? How Do You Correct Depreciation Deductions? Section 179 Expense DeductionWhat Property Qualifies? What Property Does Not Qualify? How Much Can You Deduct? How Do You Elect the Deduction? When Must You Recapture the Deduction? Claiming the Special Depreciation AllowanceWhat is Qualified Property? How Can You Elect Not To Claim the Allowance? When Must You Recapture an Allowance Figuring Depreciation Under MACRSWhich Depreciation System (GDS or ADS) Applies? Which Property Class Applies Under GDS? What Is the Placed-in-Service Date? What Is the Basis for Depreciation? Which Recovery Period Applies? Which Convention Applies? Which Depreciation Method Applies? How Is the Depreciation Deduction Figured? How Do You Use General Asset Accounts? When Do You Recapture MACRS Depreciation? Additional Rules for Listed PropertyWhat Is Listed Property? What Is the Business-Use Requirement? Do the Passenger Automobile Limits Apply? Depletion Who Can Claim Depletion? Figuring Depletion AmortizationBusiness Start-Up Costs Reforestation Costs Section 197 Intangibles What's New for 2013 Increased section 179 expense deduction dollar limits. 2010 turbotax  The maximum amount you can elect to deduct for most section 179 property you placed in service in 2013 is $500,000. 2010 turbotax This limit is reduced by the amount by which the cost of the property placed in service during the tax year exceeds $2 million. 2010 turbotax See Dollar Limits under Section 179 Expense Deduction , later. 2010 turbotax Extension of special depreciation allowance for certain qualified property acquired after December 31, 2007. 2010 turbotax . 2010 turbotax  You may be able to take a 50% special depreciation allowance for certain qualified property acquired after December 31, 2007, and placed in service before January 1, 2014. 2010 turbotax See Claiming the Special Depreciation Allowance , later. 2010 turbotax Expiration of the 3- year recovery period for certain race horses. 2010 turbotax  The 3-year recovery period for race horses two years old or younger will expire for such horses placed in service after December 31, 2013. 2010 turbotax Introduction If you buy or make improvements to farm property such as machinery, equipment, livestock, or a structure with a useful life of more than a year, you generally cannot deduct its entire cost in one year. 2010 turbotax Instead, you must spread the cost over the time you use the property and deduct part of it each year. 2010 turbotax For most types of property, this is called depreciation. 2010 turbotax This chapter gives information on depreciation methods that generally apply to property placed in service after 1986. 2010 turbotax For information on depreciating pre-1987 property, see Publication 534, Depreciating Property Placed in Service Before 1987. 2010 turbotax Topics - This chapter discusses: Overview of depreciation Section 179 expense deduction Special depreciation allowance Modified Accelerated Cost Recovery System (MACRS) Listed property Basic information on cost depletion (including timber depletion) and percentage depletion Amortization of the costs of going into business, reforestation costs, the costs of pollution control facilities, and the costs of section 197 intangibles Useful Items - You may want to see: Publication 463 Travel, Entertainment, Gift, and Car Expenses 534 Depreciating Property Placed in Service Before 1987 535 Business Expenses 544 Sales and Other Dispositions of Assets 551 Basis of Assets 946 How To Depreciate Property Form (and Instructions) T (Timber), Forest Activities Schedule 3115 Application for Change in Accounting Method 4562 Depreciation and Amortization 4797 Sales of Business Property See chapter 16 for information about getting publications and forms. 2010 turbotax It is important to keep good records for property you depreciate. 2010 turbotax Do not file these records with your return. 2010 turbotax Instead, you should keep them as part of the permanent records of the depreciated property. 2010 turbotax They will help you verify the accuracy of the depreciation of assets placed in service in the current and previous tax years. 2010 turbotax For general information on recordkeeping, see Publication 583, Starting a Business and Keeping Records. 2010 turbotax For specific information on keeping records for section 179 property and listed property, see Publication 946, How To Depreciate Property. 2010 turbotax Overview of Depreciation This overview discusses basic information on the following. 2010 turbotax What property can be depreciated. 2010 turbotax What property cannot be depreciated. 2010 turbotax When depreciation begins and ends. 2010 turbotax Whether MACRS can be used to figure depreciation. 2010 turbotax What is the basis of your depreciable property. 2010 turbotax How to treat repairs and improvements. 2010 turbotax When you must file Form 4562. 2010 turbotax How you can correct depreciation claimed incorrectly. 2010 turbotax What Property Can Be Depreciated? You can depreciate most types of tangible property (except land), such as buildings, machinery, equipment, vehicles, certain livestock, and furniture. 2010 turbotax You can also depreciate certain intangible property, such as copyrights, patents, and computer software. 2010 turbotax To be depreciable, the property must meet all the following requirements. 2010 turbotax It must be property you own. 2010 turbotax It must be used in your business or income-producing activity. 2010 turbotax It must have a determinable useful life. 2010 turbotax It must have a useful life that extends substantially beyond the year you place it in service. 2010 turbotax Property You Own To claim depreciation, you usually must be the owner of the property. 2010 turbotax You are considered as owning property even if it is subject to a debt. 2010 turbotax Leased property. 2010 turbotax   You can depreciate leased property only if you retain the incidents of ownership in the property. 2010 turbotax This means you bear the burden of exhaustion of the capital investment in the property. 2010 turbotax Therefore, if you lease property from someone to use in your trade or business or for the production of income, you generally cannot depreciate its cost because you do not retain the incidents of ownership. 2010 turbotax You can, however, depreciate any capital improvements you make to the leased property. 2010 turbotax See Additions and Improvements under Which Recovery Period Applies in chapter 4 of Publication 946. 2010 turbotax   If you lease property to someone, you generally can depreciate its cost even if the lessee (the person leasing from you) has agreed to preserve, replace, renew, and maintain the property. 2010 turbotax However, you cannot depreciate the cost of the property if the lease provides that the lessee is to maintain the property and return to you the same property or its equivalent in value at the expiration of the lease in as good condition and value as when leased. 2010 turbotax Life tenant. 2010 turbotax   Generally, if you hold business or investment property as a life tenant, you can depreciate it as if you were the absolute owner of the property. 2010 turbotax See Certain term interests in property , later, for an exception. 2010 turbotax Property Used in Your Business or Income-Producing Activity To claim depreciation on property, you must use it in your business or income-producing activity. 2010 turbotax If you use property to produce income (investment use), the income must be taxable. 2010 turbotax You cannot depreciate property that you use solely for personal activities. 2010 turbotax However, if you use property for business or investment purposes and for personal purposes, you can deduct depreciation based only on the percentage of business or investment use. 2010 turbotax Example 1. 2010 turbotax   If you use your car for farm business, you can deduct depreciation based on its percentage of use in farming. 2010 turbotax If you also use it for investment purposes, you can depreciate it based on its percentage of investment use. 2010 turbotax Example 2. 2010 turbotax   If you use part of your home for business, you may be able to deduct depreciation on that part based on its business use. 2010 turbotax For more information, see Business Use of Your Home in chapter 4. 2010 turbotax Inventory. 2010 turbotax   You can never depreciate inventory because it is not held for use in your business. 2010 turbotax Inventory is any property you hold primarily for sale to customers in the ordinary course of your business. 2010 turbotax Livestock. 2010 turbotax   Livestock purchased for draft, breeding, or dairy purposes can be depreciated only if they are not kept in an inventory account. 2010 turbotax Livestock you raise usually has no depreciable basis because the costs of raising them are deducted and not added to their basis. 2010 turbotax However, see Immature livestock under When Does Depreciation Begin and End , later, for a special rule. 2010 turbotax Property Having a Determinable Useful Life To be depreciable, your property must have a determinable useful life. 2010 turbotax This means it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. 2010 turbotax Irrigation systems and water wells. 2010 turbotax   Irrigation systems and wells used in a trade or business can be depreciated if their useful life can be determined. 2010 turbotax You can depreciate irrigation systems and wells composed of masonry, concrete, tile, metal, or wood. 2010 turbotax In addition, you can depreciate costs for moving dirt to construct irrigation systems and water wells composed of these materials. 2010 turbotax However, land preparation costs for center pivot irrigation systems are not depreciable. 2010 turbotax Dams, ponds, and terraces. 2010 turbotax   In general, you cannot depreciate earthen dams, ponds, and terraces unless the structures have a determinable useful life. 2010 turbotax What Property Cannot Be Depreciated? Certain property cannot be depreciated, even if the requirements explained earlier are met. 2010 turbotax This includes the following. 2010 turbotax Land. 2010 turbotax You can never depreciate the cost of land because land does not wear out, become obsolete, or get used up. 2010 turbotax The cost of land generally includes the cost of clearing, grading, planting, and landscaping. 2010 turbotax Although you cannot depreciate land, you can depreciate certain costs incurred in preparing land for business use. 2010 turbotax See chapter 1 of Publication 946. 2010 turbotax Property placed in service and disposed of in the same year. 2010 turbotax Determining when property is placed in service is explained later. 2010 turbotax Equipment used to build capital improvements. 2010 turbotax You must add otherwise allowable depreciation on the equipment during the period of construction to the basis of your improvements. 2010 turbotax Intangible property such as section 197 intangibles. 2010 turbotax This property does not have a determinable useful life and generally cannot be depreciated. 2010 turbotax However, see Amortization , later. 2010 turbotax Special rules apply to computer software (discussed below). 2010 turbotax Certain term interests (discussed below). 2010 turbotax Computer software. 2010 turbotax   Computer software is generally not a section 197 intangible even if acquired in connection with the acquisition of a business, if it meets all of the following tests. 2010 turbotax It is readily available for purchase by the general public. 2010 turbotax It is subject to a nonexclusive license. 2010 turbotax It has not been substantially modified. 2010 turbotax   If the software meets the tests above, it can be depreciated and may qualify for the section 179 expense deduction and the special depreciation allowance (if applicable), discussed later. 2010 turbotax Certain term interests in property. 2010 turbotax   You cannot depreciate a term interest in property created or acquired after July 27, 1989, for any period during which the remainder interest is held, directly or indirectly, by a person related to you. 2010 turbotax This rule does not apply to the holder of a term interest in property acquired by gift, bequest, or inheritance. 2010 turbotax For more information, see chapter 1 of Publication 946. 2010 turbotax When Does Depreciation Begin and End? You begin to depreciate your property when you place it in service for use in your trade or business or for the production of income. 2010 turbotax You stop depreciating property either when you have fully recovered your cost or other basis or when you retire it from service, whichever happens first. 2010 turbotax Placed in Service Property is placed in service when it is ready and available for a specific use, whether in a business activity, an income-producing activity, a tax-exempt activity, or a personal activity. 2010 turbotax Even if you are not using the property, it is in service when it is ready and available for its specific use. 2010 turbotax Example. 2010 turbotax You bought a planter for use in your farm business. 2010 turbotax The planter was delivered in December 2012 after harvest was over. 2010 turbotax You begin to depreciate the planter for 2012 because it was ready and available for its specific use in 2012, even though it will not be used until the spring of 2013. 2010 turbotax If your planter comes unassembled in December 2012 and is put together in February 2013, it is not placed in service until 2013. 2010 turbotax You begin to depreciate it in 2013. 2010 turbotax If your planter was delivered and assembled in February 2013 but not used until April 2013, it is placed in service in February 2013, because this is when the planter was ready for its specified use. 2010 turbotax You begin to depreciate it in 2013. 2010 turbotax Fruit or nut trees and vines. 2010 turbotax   If you acquire an orchard, grove, or vineyard before the trees or vines have reached the income-producing stage, and they have a preproductive period of more than 2 years, you must capitalize the preproductive-period costs under the uniform capitalization rules (unless you elect not to use these rules). 2010 turbotax See chapter 6 for information about the uniform capitalization rules. 2010 turbotax Your depreciation begins when the trees and vines reach the income-producing stage (that is, when they bear fruit, nuts, or grapes in quantities sufficient to commercially warrant harvesting). 2010 turbotax Immature livestock. 2010 turbotax   Depreciation for livestock begins when the livestock reaches the age of maturity. 2010 turbotax If you bought immature livestock for drafting purposes, depreciation begins when they can be worked. 2010 turbotax If you bought immature livestock for dairy purposes, depreciation begins when they can be milked. 2010 turbotax If you bought immature livestock for breeding purposes, depreciation begins when they can be bred. 2010 turbotax Your basis for depreciation is your initial cost for the immature livestock. 2010 turbotax Idle Property Continue to claim a deduction for depreciation on property used in your business or for the production of income even if it is temporarily idle. 2010 turbotax For example, if you stop using a machine because there is a temporary lack of a market for a product made with that machine, continue to deduct depreciation on the machine. 2010 turbotax Cost or Other Basis Fully Recovered You stop depreciating property when you have fully recovered your cost or other basis. 2010 turbotax This happens when your section 179 and allowed or allowable depreciation deductions equal your cost or investment in the property. 2010 turbotax Retired From Service You stop depreciating property when you retire it from service, even if you have not fully recovered its cost or other basis. 2010 turbotax You retire property from service when you permanently withdraw it from use in a trade or business or from use in the production of income because of any of the following events. 2010 turbotax You sell or exchange the property. 2010 turbotax You convert the property to personal use. 2010 turbotax You abandon the property. 2010 turbotax You transfer the property to a supplies or scrap account. 2010 turbotax The property is destroyed. 2010 turbotax For information on abandonment of property, see chapter 8. 2010 turbotax For information on destroyed property, see chapter 11 and Publication 547, Casualties, Disasters, and Thefts. 2010 turbotax Can You Use MACRS To Depreciate Your Property? You must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate most business and investment property placed in service after 1986. 2010 turbotax MACRS is explained later under Figuring Depreciation Under MACRS . 2010 turbotax You cannot use MACRS to depreciate the following property. 2010 turbotax Property you placed in service before 1987. 2010 turbotax Use the methods discussed in Publication 534. 2010 turbotax Certain property owned or used in 1986. 2010 turbotax See chapter 1 of Publication 946. 2010 turbotax Intangible property. 2010 turbotax Films, video tapes, and recordings. 2010 turbotax Certain corporate or partnership property acquired in a nontaxable transfer. 2010 turbotax Property you elected to exclude from MACRS. 2010 turbotax For more information, see chapter 1 of Publication 946. 2010 turbotax What Is the Basis of Your Depreciable Property? To figure your depreciation deduction, you must determine the basis of your property. 2010 turbotax To determine basis, you need to know the cost or other basis of your property. 2010 turbotax Cost or other basis. 2010 turbotax   The basis of property you buy is usually its cost plus amounts you paid for items such as sales tax, freight charges, and installation and testing fees. 2010 turbotax The cost includes the amount you pay in cash, debt obligations, other property, or services. 2010 turbotax   There are times when you cannot use cost as basis. 2010 turbotax In these situations, the fair market value (FMV) or the adjusted basis of the property may be used. 2010 turbotax Adjusted basis. 2010 turbotax   To find your property's basis for depreciation, you may have to make certain adjustments (increases and decreases) to the basis of the property for events occurring between the time you acquired the property and the time you placed it in service. 2010 turbotax Basis adjustment for depreciation allowed or allowable. 2010 turbotax   After you place your property in service, you must reduce the basis of the property by the depreciation allowed or allowable, whichever is greater. 2010 turbotax Depreciation allowed is depreciation you actually deducted (from which you received a tax benefit). 2010 turbotax Depreciation allowable is depreciation you are entitled to deduct. 2010 turbotax   If you do not claim depreciation you are entitled to deduct, you must still reduce the basis of the property by the full amount of depreciation allowable. 2010 turbotax   If you deduct more depreciation than you should, you must reduce your basis by any amount deducted from which you received a tax benefit (the depreciation allowed). 2010 turbotax   For more information, see chapter 6. 2010 turbotax How Do You Treat Repairs and Improvements? You generally deduct the cost of repairing business property in the same way as any other business expense. 2010 turbotax However, if a repair or replacement increases the value of your property, makes it more useful, or lengthens its life, you must treat it as an improvement and depreciate it. 2010 turbotax Treat improvements as separate depreciable property. 2010 turbotax See chapter 1 of Publication 946 for more information. 2010 turbotax Example. 2010 turbotax You repair a small section on a corner of the roof of a barn that you rent to others. 2010 turbotax You deduct the cost of the repair as a business expense. 2010 turbotax However, if you replace the entire roof, the new roof is considered to be an improvement because it increases the value and lengthens the life for the property. 2010 turbotax You depreciate the cost of the new roof. 2010 turbotax Improvements to rented property. 2010 turbotax   You can depreciate permanent improvements you make to business property you rent from someone else. 2010 turbotax Do You Have To File Form 4562? Use Form 4562 to claim your deduction for depreciation and amortization. 2010 turbotax You must complete and attach Form 4562 to your tax return if you are claiming any of the following. 2010 turbotax A section 179 expense deduction for the current year or a section 179 carryover from a prior year. 2010 turbotax Depreciation for property placed in service during the current year. 2010 turbotax Depreciation on any vehicle or other listed property, regardless of when it was placed in service. 2010 turbotax Amortization of costs that began in the current year. 2010 turbotax For more information, see the Instructions for Form 4562. 2010 turbotax How Do You Correct Depreciation Deductions? If you deducted an incorrect amount of depreciation in any year, you may be able to make a correction by filing an amended return for that year. 2010 turbotax You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations. 2010 turbotax You claimed the incorrect amount because of a mathematical error made in any year. 2010 turbotax You claimed the incorrect amount because of a posting error made in any year, for example, omitting an asset from the depreciation schedule. 2010 turbotax You have not adopted a method of accounting for the property placed in service by you in tax years ending after December 29, 2003. 2010 turbotax You claimed the incorrect amount on property placed in service by you in tax years ending before December 30, 2003. 2010 turbotax Note. 2010 turbotax You have adopted a method of accounting if you used the same incorrect method of depreciation for two or more consecutively filed returns. 2010 turbotax If you are not allowed to make the correction on an amended return, you may be able to change your accounting method to claim the correct amount of depreciation. 2010 turbotax See the Instructions for Form 3115. 2010 turbotax Section 179 Expense Deduction You can elect to recover all or part of the cost of certain qualifying property, up to a limit, by deducting it in the year you place the property in service. 2010 turbotax This is the section 179 expense deduction. 2010 turbotax You can elect the section 179 expense deduction instead of recovering the cost by taking depreciation deductions. 2010 turbotax This part of the chapter explains the rules for the section 179 expense deduction. 2010 turbotax It explains what property qualifies for the deduction, what property does not qualify for the deduction, the limits that may apply, how to elect the deduction, and when you may have to recapture the deduction. 2010 turbotax For more information, see chapter 2 of Publication 946. 2010 turbotax What Property Qualifies? To qualify for the section 179 expense deduction, your property must meet all the following requirements. 2010 turbotax It must be eligible property. 2010 turbotax It must be acquired for business use. 2010 turbotax It must have been acquired by purchase. 2010 turbotax Eligible Property To qualify for the section 179 expense deduction, your property must be one of the following types of depreciable property. 2010 turbotax Tangible personal property. 2010 turbotax Qualified real property. 2010 turbotax (Special rules apply to qualified real property that you elect to treat as qualified section 179 real property. 2010 turbotax For more information, see chapter 2 of Publication 946 and section 179(f) of the Internal Revenue Code. 2010 turbotax ) Other tangible property (except buildings and their structural components) used as: An integral part of manufacturing, production, or extraction or of furnishing transportation, communications, electricity, gas, water, or sewage disposal services; A research facility used in connection with any of the activities in (a) above; or A facility used in connection with any of the activities in (a) for the bulk storage of fungible commodities. 2010 turbotax Single purpose agricultural (livestock) or horticultural structures. 2010 turbotax Storage facilities (except buildings and their structural components) used in connection with distributing petroleum or any primary product of petroleum. 2010 turbotax Off-the-shelf computer software that is readily available for purchase by the general public, is subject to a nonexclusive lease, and has not been substantially modified. 2010 turbotax Tangible personal property. 2010 turbotax   Tangible personal property is any tangible property that is not real property. 2010 turbotax It includes the following property. 2010 turbotax Machinery and equipment. 2010 turbotax Property contained in or attached to a building (other than structural components), such as milk tanks, automatic feeders, barn cleaners, and office equipment. 2010 turbotax Gasoline storage tanks and pumps at retail service stations. 2010 turbotax Livestock, including horses, cattle, hogs, sheep, goats, and mink and other fur-bearing animals. 2010 turbotax Facility used for the bulk storage of fungible commodities. 2010 turbotax   A facility used for the bulk storage of fungible commodities is qualifying property for purposes of the section 179 expense deduction if it is used in connection with any of the activities listed earlier in item (3)(a). 2010 turbotax Bulk storage means the storage of a commodity in a large mass before it is used. 2010 turbotax Grain bins. 2010 turbotax   A grain bin is an example of a storage facility that is qualifying section 179 property. 2010 turbotax It is a facility used in connection with the production of grain or livestock for the bulk storage of fungible commodities. 2010 turbotax Single purpose agricultural or horticultural structures. 2010 turbotax   A single purpose agricultural (livestock) or horticultural structure is qualifying property for purposes of the section 179 expense deduction. 2010 turbotax Agricultural structure. 2010 turbotax   A single purpose agricultural (livestock) structure is any building or enclosure specifically designed, constructed, and used for both the following reasons. 2010 turbotax To house, raise, and feed a particular type of livestock and its produce. 2010 turbotax To house the equipment, including any replacements, needed to house, raise, or feed the livestock. 2010 turbotax For this purpose, livestock includes poultry. 2010 turbotax   Single purpose structures are qualifying property if used, for example, to breed chickens or hogs, produce milk from dairy cattle, or produce feeder cattle or pigs, broiler chickens, or eggs. 2010 turbotax The facility must include, as an integral part of the structure or enclosure, equipment necessary to house, raise, and feed the livestock. 2010 turbotax Horticultural structure. 2010 turbotax   A single purpose horticultural structure is either of the following. 2010 turbotax A greenhouse specifically designed, constructed, and used for the commercial production of plants. 2010 turbotax A structure specifically designed, constructed, and used for the commercial production of mushrooms. 2010 turbotax Use of structure. 2010 turbotax   A structure must be used only for the purpose that qualified it. 2010 turbotax For example, a hog barn will not be qualifying property if you use it to house poultry. 2010 turbotax Similarly, using part of your greenhouse to sell plants will make the greenhouse nonqualifying property. 2010 turbotax   If a structure includes work space, the work space can be used only for the following activities. 2010 turbotax Stocking, caring for, or collecting livestock or plants or their produce. 2010 turbotax Maintaining the enclosure or structure. 2010 turbotax Maintaining or replacing the equipment or stock enclosed or housed in the structure. 2010 turbotax Property Acquired by Purchase To qualify for the section 179 expense deduction, your property must have been acquired by purchase. 2010 turbotax For example, property acquired by gift or inheritance does not qualify. 2010 turbotax Property acquired from a related person (that is, your spouse, ancestors, or lineal descendants) is not considered acquired by purchase. 2010 turbotax Example. 2010 turbotax Ken is a farmer. 2010 turbotax He purchased two tractors, one from his brother and one from his father. 2010 turbotax He placed both tractors in service in the same year he bought them. 2010 turbotax The tractor purchased from his father does not qualify for the section 179 expense deduction because he is a related person (as defined above). 2010 turbotax The tractor purchased from his brother does qualify for the deduction because Ken is not a related person (as defined above). 2010 turbotax What Property Does Not Qualify? Land and improvements. 2010 turbotax   Land and land improvements, do not qualify as section 179 property. 2010 turbotax Land improvements include nonagricultural fences, swimming pools, paved parking areas, wharves, docks, bridges, and fences. 2010 turbotax However, agricultural fences do qualify as section 179 property. 2010 turbotax Similarly, field drainage tile also qualifies as section 179 property. 2010 turbotax Excepted property. 2010 turbotax   Even if the requirements explained in the preceding discussions are met, farmers cannot elect the section 179 expense deduction for the following property. 2010 turbotax Certain property you lease to others (if you are a noncorporate lessor). 2010 turbotax Certain property used predominantly to furnish lodging or in connection with the furnishing of lodging. 2010 turbotax Property used by a tax-exempt organization (other than a tax-exempt farmers' cooperative) unless the property is used mainly in a taxable unrelated trade or business. 2010 turbotax Property used by governmental units or foreign persons or entities (except property used under a lease with a term of less than 6 months). 2010 turbotax How Much Can You Deduct? Your section 179 expense deduction is generally the cost of the qualifying property. 2010 turbotax However, the total amount you can elect to deduct under section 179 is subject to a dollar limit and a business income limit. 2010 turbotax These limits apply to each taxpayer, not to each business. 2010 turbotax However, see Married individuals under Dollar Limits , later. 2010 turbotax See also the special rules for applying the limits for partnerships and S corporations under Partnerships and S Corporations , later. 2010 turbotax If you deduct only part of the cost of qualifying property as a section 179 expense deduction, you can generally depreciate the cost you do not deduct. 2010 turbotax Use Part I of Form 4562 to figure your section 179 expense deduction. 2010 turbotax Partial business use. 2010 turbotax   When you use property for business and nonbusiness purposes, you can elect the section 179 expense deduction only if you use it more than 50% for business in the year you place it in service. 2010 turbotax If you used the property more than 50% for business, multiply the cost of the property by the percentage of business use. 2010 turbotax Use the resulting business cost to figure your section 179 expense deduction. 2010 turbotax Trade-in of other property. 2010 turbotax   If you buy qualifying property with cash and a trade-in, its cost for purposes of the section 179 expense deduction includes only the cash you paid. 2010 turbotax For example, if you buy (for cash and a trade-in) a new tractor for use in your business, your cost for the section 179 expense deduction is the cash you paid. 2010 turbotax It does not include the adjusted basis of the old tractor you trade for the new tractor. 2010 turbotax Example. 2010 turbotax J-Bar Farms traded two cultivators having a total adjusted basis of $6,800 for a new cultivator costing $13,200. 2010 turbotax They received an $8,000 trade-in allowance for the old cultivators and paid $5,200 cash for the new cultivator. 2010 turbotax J-Bar also traded a used pickup truck with an adjusted basis of $8,000 for a new pickup truck costing $35,000. 2010 turbotax They received a $5,000 trade-in allowance and paid $30,000 cash for the new pickup truck. 2010 turbotax Only the cash paid by J-Bar qualifies for the section 179 expense deduction. 2010 turbotax J-Bar's business costs that qualify for a section 179 expense deduction are $35,200 ($5,200 + $30,000). 2010 turbotax Dollar Limits The total amount you can elect to deduct under section 179 for most property placed in service in 2013 is $500,000. 2010 turbotax If you acquire and place in service more than one item of qualifying property during the year, you can allocate the section 179 expense deduction among the items in any way, as long as the total deduction is not more than $500,000. 2010 turbotax Qualified real property that you elect to treat as section 179 property is limited to $250,000 of the maximum section 179 deduction of $500,000 for 2013. 2010 turbotax You do not have to claim the full $500,000. 2010 turbotax For specific information on the section 179 dollar limits, see chapter 2 of Publication 946. 2010 turbotax Reduced dollar limit for cost exceeding $2 million. 2010 turbotax   If the cost of your qualifying section 179 property placed in service in 2013 is over $2 million, you must reduce the dollar limit (but not below zero) by the amount of cost over $2 million. 2010 turbotax If the cost of your section 179 property placed in service during 2013 is $2,500,000 or more, you cannot take a section 179 expense deduction and you cannot carry over the cost that is more than $2,500,000. 2010 turbotax Example. 2010 turbotax This year, James Smith placed in service machinery costing $2,050,000. 2010 turbotax Because this cost is $50,000 more than $2 million, he must reduce his dollar limit to $450,000 ($500,000 − $50,000). 2010 turbotax Limits for sport utility vehicles. 2010 turbotax   The total amount you can elect to deduct for certain sport utility vehicles and certain other vehicles placed in service in 2013 is $25,000. 2010 turbotax This rule applies to any 4-wheeled vehicle primarily designed or used to carry passengers over public streets, roads, and highways that is rated at more than 6,000 pounds gross vehicle weight and not more than 14,000 pounds gross vehicle weight. 2010 turbotax   For more information, see chapter 2 of Publication 946. 2010 turbotax Limits for passenger automobiles. 2010 turbotax   For a passenger automobile that is placed in service in 2013, the total section 179 and depreciation deduction is limited. 2010 turbotax See Do the Passenger Automobile Limits Apply , later. 2010 turbotax Married individuals. 2010 turbotax   If you are married, how you figure your section 179 expense deduction depends on whether you file jointly or separately. 2010 turbotax If you file a joint return, you and your spouse are treated as one taxpayer in determining any reduction to the dollar limit, regardless of which of you purchased the property or placed it in service. 2010 turbotax If you and your spouse file separate returns, you are treated as one taxpayer for the dollar limit, including the reduction for costs over $2 million. 2010 turbotax You must allocate the dollar limit (after any reduction) equally between you, unless you both elect a different allocation. 2010 turbotax If the percentages elected by each of you do not total 100%, 50% will be allocated to each of you. 2010 turbotax Joint return after separate returns. 2010 turbotax   If you and your spouse elect to amend your separate returns by filing a joint return after the due date for filing your return, the dollar limit on the joint return is the lesser of the following amounts. 2010 turbotax The dollar limit (after reduction for any cost of section 179 property over $2 million). 2010 turbotax The total cost of section 179 property you and your spouse elected to expense on your separate returns. 2010 turbotax Business Income Limit The total cost you can deduct each year after you apply the dollar limit is limited to the taxable income from the active conduct of any trade or business during the year. 2010 turbotax Generally, you are considered to actively conduct a trade or business if you meaningfully participate in the management or operations of the trade or business. 2010 turbotax Any cost not deductible in one year under section 179 because of this limit can be carried to the next year. 2010 turbotax See Carryover of disallowed deduction , later. 2010 turbotax Taxable income. 2010 turbotax   In general, figure taxable income for this purpose by totaling the net income and losses from all trades and businesses you actively conducted during the year. 2010 turbotax In addition to net income or loss from a sole proprietorship, partnership, or S corporation, net income or loss derived from a trade or business also includes the following items. 2010 turbotax Section 1231 gains (or losses) as discussed in chapter 9. 2010 turbotax Interest from working capital of your trade or business. 2010 turbotax Wages, salaries, tips, or other pay earned by you (or your spouse if you file a joint return) as an employee of any employer. 2010 turbotax   In addition, figure taxable income without regard to any of the following. 2010 turbotax The section 179 expense deduction. 2010 turbotax The self-employment tax deduction. 2010 turbotax Any net operating loss carryback or carryforward. 2010 turbotax Any unreimbursed employee business expenses. 2010 turbotax Two different taxable income limits. 2010 turbotax   In addition to the business income limit for your section 179 expense deduction, you may have a taxable income limit for some other deduction (for example, charitable contributions). 2010 turbotax You may have to figure the limit for this other deduction taking into account the section 179 expense deduction. 2010 turbotax If so, complete the following steps. 2010 turbotax Step Action 1 Figure taxable income without the section 179 expense deduction or the other deduction. 2010 turbotax 2 Figure a hypothetical section 179 expense deduction using the taxable income figured in Step 1. 2010 turbotax 3 Subtract the hypothetical section 179 expense deduction figured in Step 2 from the taxable income figured in Step 1. 2010 turbotax 4 Figure a hypothetical amount for the other deduction using the amount figured in Step 3 as taxable income. 2010 turbotax 5 Subtract the hypothetical other deduction figured in Step 4 from the taxable income figured in  Step 1. 2010 turbotax 6 Figure your actual section 179 expense deduction using the taxable income figured in Step 5. 2010 turbotax 7 Subtract your actual section 179 expense deduction figured in Step 6 from the taxable income figured in Step 1. 2010 turbotax 8 Figure your actual other deduction using the taxable income figured in Step 7. 2010 turbotax Example. 2010 turbotax On February 1, 2013, the XYZ farm corporation purchased and placed in service qualifying section 179 property that cost $500,000. 2010 turbotax It elects to expense the entire $500,000 cost under section 179. 2010 turbotax In June, the corporation gave a charitable contribution of $10,000. 2010 turbotax A corporation's limit on charitable contributions is figured after subtracting any section 179 expense deduction. 2010 turbotax The business income limit for the section 179 expense deduction is figured after subtracting any allowable charitable contributions. 2010 turbotax XYZ's taxable income figured without the section 179 expense deduction or the deduction for charitable contributions is $520,000. 2010 turbotax XYZ figures its section 179 expense deduction and its deduction for charitable contributions as follows. 2010 turbotax Step 1. 2010 turbotax Taxable income figured without either deduction is $520,000. 2010 turbotax Step 2. 2010 turbotax Using $520,000 as taxable income, XYZ's hypothetical section 179 expense deduction is $500,000. 2010 turbotax Step 3. 2010 turbotax $20,000 ($520,000 − $500,000). 2010 turbotax Step 4. 2010 turbotax Using $20,000 (from Step 3) as taxable income, XYZ's hypothetical charitable contribution (limited to 10% of taxable income) is $2,000. 2010 turbotax Step 5. 2010 turbotax $518,000 ($520,000 − $2,000). 2010 turbotax Step 6. 2010 turbotax Using $518,000 (from Step 5) as taxable income, XYZ figures the actual section 179 expense deduction. 2010 turbotax Because the taxable income is at least $500,000, XYZ can take a $500,000 section 179 expense deduction. 2010 turbotax Step 7. 2010 turbotax $20,000 ($520,000 − $500,000). 2010 turbotax Step 8. 2010 turbotax Using $20,000 (from Step 7) as taxable income, XYZ's actual charitable contribution (limited to 10% of taxable income) is $2,000. 2010 turbotax Carryover of disallowed deduction. 2010 turbotax   You can carry over for an unlimited number of years the cost of any section 179 property you elected to expense but were unable to because of the business income limit. 2010 turbotax   The amount you carry over is used in determining your section 179 expense deduction in the next year. 2010 turbotax However, it is subject to the limits in that year. 2010 turbotax If you place more than one property in service in a year, you can select the properties for which all or a part of the cost will be carried forward. 2010 turbotax Your selections must be shown in your books and records. 2010 turbotax Example. 2010 turbotax Last year, Joyce Jones placed in service a machine that cost $8,000 and elected to deduct all $8,000 under section 179. 2010 turbotax The taxable income from her business (determined without regard to both a section 179 expense deduction for the cost of the machine and the self-employment tax deduction) was $6,000. 2010 turbotax Her section 179 expense deduction was limited to $6,000. 2010 turbotax The $2,000 cost that was not allowed as a section 179 expense deduction (because of the business income limit) is carried to this year. 2010 turbotax This year, Joyce placed another machine in service that cost $9,000. 2010 turbotax Her taxable income from business (determined without regard to both a section 179 expense deduction for the cost of the machine and the self-employment tax deduction) is $10,000. 2010 turbotax Joyce can deduct the full cost of the machine ($9,000) but only $1,000 of the carryover from last year because of the business income limit. 2010 turbotax She can carry over the balance of $1,000 to next year. 2010 turbotax Partnerships and S Corporations The section 179 expense deduction limits apply both to the partnership or S corporation and to each partner or shareholder. 2010 turbotax The partnership or S corporation determines its section 179 expense deduction subject to the limits. 2010 turbotax It then allocates the deduction among its partners or shareholders. 2010 turbotax If you are a partner in a partnership or shareholder of an S corporation, you add the amount allocated from the partnership or S corporation to any section 179 costs not related to the partnership or S corporation and then apply the dollar limit to this total. 2010 turbotax To determine any reduction in the dollar limit for costs over $560,000, you do not include any of the cost of section 179 property placed in service by the partnership or S corporation. 2010 turbotax After you apply the dollar limit, you apply the business income limit to any remaining section 179 costs. 2010 turbotax For more information, see chapter 2 of Publication 946. 2010 turbotax Example. 2010 turbotax In 2013, Partnership P placed in service section 179 property with a total cost of $2,160,000. 2010 turbotax P must reduce its dollar limit by $160,000 ($2,160,000 − $2,000,000). 2010 turbotax Its maximum section 179 expense deduction is $340,000 ($500,000 − $160,000), and it elects to expense that amount. 2010 turbotax Because P's taxable income from the active conduct of all its trades or businesses for the year was $400,000, it can deduct the full $340,000. 2010 turbotax P allocates $100,000 of its section 179 expense deduction and $110,000 of its taxable income to John, one of its partners. 2010 turbotax John also conducts a business as a sole proprietor and in 2013, placed in service in that business, section 179 property costing $28,000. 2010 turbotax John's taxable income from that business was $10,000. 2010 turbotax In addition to the $100,000 allocated from P, he elects to expense the $28,000 of his sole proprietorship's section 179 costs. 2010 turbotax However, John's deduction is limited to his business taxable income of $120,000 ($110,000 from P plus $10,000 from his sole proprietorship). 2010 turbotax He carries over $8,000 ($128,000 − $120,000) of the elected section 179 costs to 2014. 2010 turbotax How Do You Elect the Deduction? You elect to take the section 179 expense deduction by completing Part I of Form 4562. 2010 turbotax If you elect the deduction for listed property, complete Part V of  Form 4562 before completing Part I. 2010 turbotax   File Form 4562 with either of the following: Your original tax return (whether or not you filed it timely), or An amended return filed within the time prescribed by law. 2010 turbotax An election made on an amended return must specify the item of section 179 property to which the election applies and the part of the cost of each such item to be taken into account. 2010 turbotax The amended return must also include any resulting adjustments to taxable income. 2010 turbotax Revoking an election. 2010 turbotax   An election (or any specification made in the election) to take a section 179 expense deduction for 2013 can be revoked without IRS approval by filing an amended return. 2010 turbotax The amended return must be filed within the time prescribed by law. 2010 turbotax The amended return must also include any resulting adjustments to taxable income (for example, allowable depreciation in that tax year for the item of section 179 property for which the election pertains. 2010 turbotax ) Once made, the revocation is irrevocable. 2010 turbotax When Must You Recapture the Deduction? You may have to recapture the section 179 expense deduction if, in any year during the property's recovery period, the percentage of business use drops to 50% or less. 2010 turbotax In the year the business use drops to 50% or less, you include the recapture amount as ordinary income. 2010 turbotax You also increase the basis of the property by the recapture amount. 2010 turbotax Recovery periods for property are discussed later. 2010 turbotax If you sell, exchange, or otherwise dispose of the property, do not figure the recapture amount under the rules explained in this discussion. 2010 turbotax Instead, use the rules for recapturing depreciation explained in  chapter 9 under Section 1245 Property. 2010 turbotax   If the property is listed property, do not figure the recapture amount under the rules explained in this discussion when the percentage of business use drops to 50% or less. 2010 turbotax Instead, use the rules for recapturing depreciation explained in chapter 5 of Publication 946 under Recapture of Excess Depreciation. 2010 turbotax Figuring the recapture amount. 2010 turbotax   To figure the amount to recapture, take the following steps. 2010 turbotax Figure the allowable depreciation for the section 179 expense deduction you claimed. 2010 turbotax Begin with the year you placed the property in service and include the year of recapture. 2010 turbotax Subtract the depreciation figured in (1) from the section 179 expense deduction you actually claimed. 2010 turbotax The result is the amount you must recapture. 2010 turbotax Example. 2010 turbotax In January 2011, Paul Lamb, a calendar year taxpayer, bought and placed in service section 179 property costing $10,000. 2010 turbotax The property is not listed property. 2010 turbotax He elected a $5,000 section 179 expense deduction for the property and also elected not to claim a special depreciation allowance. 2010 turbotax He used the property only for business in 2011 and 2012. 2010 turbotax During 2013, he used the property 40% for business and 60% for personal use. 2010 turbotax He figures his recapture amount as follows. 2010 turbotax Section 179 expense deduction claimed (2011) $5,000 Minus: Allowable depreciation (instead of section 179 expense deduction):   2011 $1,250   2012 1,875   2013 ($1,250 × 40% (business)) 500 3,625 2013 — Recapture amount $1,375     Paul must include $1,375 in income for 2013. 2010 turbotax Where to report recapture. 2010 turbotax   Report any recapture of the section 179 expense deduction as ordinary income in Part IV of Form 4797 and include it in income on Schedule F (Form 1040). 2010 turbotax Recapture for qualified section 179 GO Zone property. 2010 turbotax   If any qualified section 179 GO Zone property ceases to be used in the GO Zone in a later year, you must recapture the benefit of the increased section 179 expense deduction as “other income. 2010 turbotax ” Claiming the Special Depreciation Allowance For qualified property (defined below) placed in service in 2013, you can take an additional 50% special depreciation allowance. 2010 turbotax The allowance is an additional deduction you can take after any section 179 expense deduction and before you figure regular depreciation under MACRS. 2010 turbotax Figure the special depreciation allowance by multiplying the depreciable basis of the qualified property by 50%. 2010 turbotax What is Qualified Property? For farmers, qualified property generally is certain qualified property acquired after December 31, 2007, and placed in service before January 1, 2014. 2010 turbotax Certain qualified property acquired after December 31, 2007, and placed in service before January 1, 2014. 2010 turbotax   Certain qualified property (defined below) acquired after December 31, 2007, and before January 1, 2014, is eligible for a 50% special depreciation allowance. 2010 turbotax   Qualified property includes the following: Tangible property depreciated under the Modified Accelerated Cost Recovery System (MACRS) with a recovery period of 20 years or less. 2010 turbotax Water utility property. 2010 turbotax Off-the-shelf computer software. 2010 turbotax Qualified leasehold improvement property. 2010 turbotax   Qualified property must also meet all of the following tests: You must have acquired qualified property by purchase after December 31, 2007. 2010 turbotax If a binding contract to acquire the property existed before January 1, 2008, the property does not qualify. 2010 turbotax Qualified property must be placed in service after December 31, 2007 and placed in service before January 1, 2014 (before January 1, 2015 for certain property with a long production period and for certain aircraft). 2010 turbotax The original use of the property must begin with you after December 31, 2007. 2010 turbotax For more information, see chapter 3 of Publication 946. 2010 turbotax How Can You Elect Not To Claim the Allowance? You can elect, for any class of property, not to deduct the special depreciation allowance for all property in such class placed in service during the tax year. 2010 turbotax To make the election, attach a statement to your return indicating the class of property for which you are making the election. 2010 turbotax Generally, you must make the election on a timely filed tax return (including extensions) for the year in which you place the property in service. 2010 turbotax However, if you timely filed your return for the year without making the election, you still can make the election by filing an amended return within 6 months of the due date of the original return (not including extensions). 2010 turbotax Attach the election statement to the amended return. 2010 turbotax On the amended return, write “Filed pursuant to section 301. 2010 turbotax 9100-2. 2010 turbotax ” Once made, the election may not be revoked without IRS consent. 2010 turbotax If you elect not to have the special depreciation allowance apply, the property may be subject to an alternative minimum tax adjustment for depreciation. 2010 turbotax When Must You Recapture an Allowance When you dispose of property for which you claimed a special depreciation allowance, any gain on the disposition is generally recaptured (included in income) as ordinary income up to the amount of the special depreciation allowance previously allowed or allowable. 2010 turbotax For more information, see chapter 3 of Publication 946. 2010 turbotax Figuring Depreciation Under MACRS The Modified Accelerated Cost Recovery System (MACRS) is used to recover the basis of most business and investment property placed in service after 1986. 2010 turbotax MACRS consists of two depreciation systems, the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). 2010 turbotax Generally, these systems provide different methods and recovery periods to use in figuring depreciation deductions. 2010 turbotax To be sure you can use MACRS to figure depreciation for your property, see Can You Use MACRS To Depreciate Your Property, earlier. 2010 turbotax This part explains how to determine which MACRS depreciation system applies to your property. 2010 turbotax It also discusses the following information that you need to know before you can figure depreciation under MACRS. 2010 turbotax Property's recovery class. 2010 turbotax Placed-in-service date. 2010 turbotax Basis for depreciation. 2010 turbotax Recovery period. 2010 turbotax Convention. 2010 turbotax Depreciation method. 2010 turbotax Finally, this part explains how to use this information to figure your depreciation deduction. 2010 turbotax Which Depreciation System (GDS or ADS) Applies? Your use of either the General Depreciation System (GDS) or the Alternative Depreciation System (ADS) to depreciate property under MACRS determines what depreciation method and recovery period you use. 2010 turbotax You generally must use GDS unless you are specifically required by law to use ADS or you elect to use ADS. 2010 turbotax Required use of ADS. 2010 turbotax   You must use ADS for the following property. 2010 turbotax All property used predominantly in a farming business and placed in service in any tax year during which an election not to apply the uniform capitalization rules to certain farming costs is in effect. 2010 turbotax Listed property used 50% or less in a qualified business use. 2010 turbotax See Additional Rules for Listed Property , later. 2010 turbotax Any tax-exempt use property. 2010 turbotax Any tax-exempt bond-financed property. 2010 turbotax Any property imported from a foreign country for which an Executive Order is in effect because the country maintains trade restrictions or engages in other discriminatory acts. 2010 turbotax Any tangible property used predominantly outside the United States during the year. 2010 turbotax If you are required to use ADS to depreciate your property, you cannot claim the special depreciation allowance. 2010 turbotax Electing ADS. 2010 turbotax   Although your property may qualify for GDS, you can elect to use ADS. 2010 turbotax The election generally must cover all property in the same property class you placed in service during the year. 2010 turbotax However, the election for residential rental property and nonresidential real property can be made on a property-by-property basis. 2010 turbotax Once you make this election, you can never revoke it. 2010 turbotax   You make the election by completing line 20 in Part III of Form 4562. 2010 turbotax Which Property Class Applies Under GDS? The following is a list of the nine property classes under GDS. 2010 turbotax 3-year property. 2010 turbotax 5-year property. 2010 turbotax 7-year property. 2010 turbotax 10-year property. 2010 turbotax 15-year property. 2010 turbotax 20-year property. 2010 turbotax 25-year property. 2010 turbotax Residential rental property. 2010 turbotax Nonresidential real property. 2010 turbotax See Which Property Class Applies Under GDS in chapter 4 of Publication 946 for examples of the types of property included in each class. 2010 turbotax What Is the Placed-in-Service Date? You begin to claim depreciation when your property is placed in service for use either in a trade or business or for the production of income. 2010 turbotax The placed-in-service date for your property is the date the property is ready and available for a specific use. 2010 turbotax It is therefore not necessarily the date it is first used. 2010 turbotax If you converted property held for personal use to use in a trade or business or for the production of income, treat the property as being placed in service on the conversion date. 2010 turbotax See Placed in Service under When Does Depreciation Begin and End , earlier, for examples illustrating when property is placed in service. 2010 turbotax What Is the Basis for Depreciation? The basis for depreciation of MACRS property is the property's cost or other basis multiplied by the percentage of business/investment use. 2010 turbotax Reduce that amount by any credits and deductions allocable to the property. 2010 turbotax The following are examples of some of the credits and deductions that reduce basis. 2010 turbotax Any deduction for section 179 property. 2010 turbotax Any deduction for removal of barriers to the disabled and the elderly. 2010 turbotax Any disabled access credit, enhanced oil recovery credit, and credit for employer-provided childcare facilities and services. 2010 turbotax Any special depreciation allowance. 2010 turbotax Basis adjustment for investment credit property under section 50(c) of the Internal Revenue Code. 2010 turbotax For information about how to determine the cost or other basis of property, see What Is the Basis of Your Depreciable Property , earlier. 2010 turbotax Also, see chapter 6. 2010 turbotax For additional credits and deductions that affect basis, see section 1016 of the Internal Revenue Code. 2010 turbotax Which Recovery Period Applies? The recovery period of property is the number of years over which you recover its cost or other basis. 2010 turbotax It is determined based on the depreciation system (GDS or ADS) used. 2010 turbotax See Table 7-1 for recovery periods under both GDS and ADS for some commonly used assets. 2010 turbotax For a complete list of recovery periods, see the Table of Class Lives and Recovery Periods in Appendix B of Publication 946. 2010 turbotax House trailers for farm laborers. 2010 turbotax   To depreciate a house trailer you supply as housing for those who work on your farm, use one of the following recovery periods if the house trailer is mobile (it has wheels and a history of movement). 2010 turbotax A 7-year recovery period under GDS. 2010 turbotax A 10-year recovery period under ADS. 2010 turbotax   However, if the house trailer is not mobile (its wheels have been removed and permanent utilities and pipes attached to it), use one of the following recovery periods. 2010 turbotax A 20-year recovery period under GDS. 2010 turbotax A 25-year recovery period under ADS. 2010 turbotax Water wells. 2010 turbotax   Water wells used to provide water for raising poultry and livestock are land improvements. 2010 turbotax If they are depreciable, use one of the following recovery periods. 2010 turbotax A 15-year recovery period under GDS. 2010 turbotax A 20-year recovery period under ADS. 2010 turbotax   The types of water wells that can be depreciated were discussed earlier in Irrigation systems and water wells under Property Having a Determinable Useful Life . 2010 turbotax Table 7-1. 2010 turbotax Farm Property Recovery Periods   Recovery Period in Years Assets GDS ADS Agricultural structures (single purpose) 10 15 Automobiles 5 5 Calculators and copiers 5 6 Cattle (dairy or breeding) 5 7 Communication equipment1 7 10 Computer and peripheral equipment 5 5 Drainage facilities 15 20 Farm buildings2 20 25 Farm machinery and equipment 7 10 Fences (agricultural) 7 10 Goats and sheep (breeding) 5 5 Grain bin 7 10 Hogs (breeding) 3 3 Horses (age when placed in service)     Breeding and working (12 years or less) 7 10 Breeding and working (more than 12 years) 3 10 Racing horses 3 12 Horticultural structures (single purpose) 10 15 Logging machinery and equipment3 5 6 Nonresidential real property 394 40 Office furniture, fixtures, and equipment (not calculators, copiers, or typewriters) 7 10 Paved lots 15 20 Residential rental property 27. 2010 turbotax 5 40 Tractor units (over-the-road) 3 4 Trees or vines bearing fruit or nuts 10 20 Truck (heavy duty, unloaded weight 13,000 lbs. 2010 turbotax or more) 5 6 Truck (actual weight less than 13,000 lbs) 5 5 Water wells 15 20 1 Not including communication equipment listed in other classes. 2010 turbotax 2 Not including single purpose agricultural or horticultural structures. 2010 turbotax 3 Used by logging and sawmill operators for cutting of timber. 2010 turbotax 4 For property placed in service after May 12, 1993; for property placed in service before May 13, 1993,  the recovery period is 31. 2010 turbotax 5 years. 2010 turbotax Which Convention Applies? Under MACRS, averaging conventions establish when the recovery period begins and ends. 2010 turbotax The convention you use determines the number of months for which you can claim depreciation in the year you place property in service and in the year you dispose of the property. 2010 turbotax Use one of the following conventions. 2010 turbotax The half-year convention. 2010 turbotax The mid-month convention. 2010 turbotax The mid-quarter convention. 2010 turbotax For a detailed explanation of each convention, see Which Convention Applies in chapter 4 of Publication 946. 2010 turbotax Also, see the Instructions for Form 4562. 2010 turbotax Which Depreciation Method Applies? MACRS provides three depreciation methods under GDS and one depreciation method under ADS. 2010 turbotax The 200% declining balance method over a GDS recovery period. 2010 turbotax The 150% declining balance method over a GDS recovery period. 2010 turbotax The straight line method over a GDS recovery period. 2010 turbotax The straight line method over an ADS recovery period. 2010 turbotax Depreciation Table. 2010 turbotax   The following table lists the types of property you can depreciate under each method. 2010 turbotax The declining balance method is abbreviated as DB and the straight line method is abbreviated as SL. 2010 turbotax Depreciation Table System/Method   Type of Property GDS using  150% DB • All property used in a farming business (except real property)   • All 15- and 20-year property   • Nonfarm 3-, 5-, 7-, and 10-year property1 GDS using SL • Nonresidential real property   • Residential rental property   • Trees or vines bearing fruit or nuts   • All 3-, 5-, 7-, 10-, 15-, and 20-year property1 ADS using SL • Property used predomi- nantly outside the United States   • Farm property used when an election not to apply the uniform capitalization rules is in effect   • Tax-exempt property   • Tax-exempt bond-financed property   • Imported property2   • Any property for which you elect to use this method1 GDS using  200% DB • Nonfarm 3-, 5-, 7-, and 10-year property 1Elective method 2See section 168(g)(6) of the Internal Revenue  Code Property used in farming business. 2010 turbotax   For personal property placed in service after 1988 in a farming business, you must use the 150% declining balance method over a GDS recovery period or you can elect one of the following methods. 2010 turbotax The straight line method over a GDS recovery period. 2010 turbotax The straight line method over an ADS recovery period. 2010 turbotax For property placed in service before 1999, you could have elected to use the 150% declining balance method using the ADS recovery periods for certain property classes. 2010 turbotax If you made this election, continue to use the same method and recovery period for that property. 2010 turbotax Real property. 2010 turbotax   You can depreciate real property using the straight line method under either GDS or ADS. 2010 turbotax Switching to straight line. 2010 turbotax   If you use a declining balance method, you switch to the straight line method in the year it provides an equal or greater deduction. 2010 turbotax If you use the MACRS percentage tables, discussed later under How Is the Depreciation Deduction Figured , you do not need to determine in which year your deduction is greater using the straight line method. 2010 turbotax The tables have the switch to the straight line method built into their rates. 2010 turbotax Fruit or nut trees and vines. 2010 turbotax   Depreciate trees and vines bearing fruit or nuts under GDS using the straight line method over a 10-year recovery period. 2010 turbotax ADS required for some farmers. 2010 turbotax   If you elect not to apply the uniform capitalization rules to any plant shown in Table 6-1 of chapter 6 and produced in your farming business, you must use ADS for all property you place in service in any year the election is in effect. 2010 turbotax See chapter 6 for a discussion of the application of the uniform capitalization rules to farm property. 2010 turbotax Electing a different method. 2010 turbotax   As shown in the Depreciation Table , you can elect a different method for depreciation for certain types of property. 2010 turbotax You must make the election by the due date of the return (including extensions) for the year you placed the property in service. 2010 turbotax However, if you timely filed your return for the year without making the election, you can still make the election by filing an amended return within 6 months of the due date of your return (excluding extensions). 2010 turbotax Attach the election to the amended return and write “Filed pursuant to section 301. 2010 turbotax 9100-2” on the election statement. 2010 turbotax File the amended return at the same address you filed the original return. 2010 turbotax Once you make the election, you cannot change it. 2010 turbotax    If you elect to use a different method for one item in a property class, you must apply the same method to all property in that class placed in service during the year of the election. 2010 turbotax However, you can make the election on a property-by-property basis for residential rental and nonresidential real property. 2010 turbotax Straight line election. 2010 turbotax   Instead of using the declining balance method, you can elect to use the straight line method over the GDS recovery period. 2010 turbotax Make the election by entering “S/L” under column (f) in Part III of Form 4562. 2010 turbotax ADS election. 2010 turbotax   As explained earlier under Which Depreciation System (GDS or ADS) Applies , you can elect to use ADS even though your property may come under GDS. 2010 turbotax ADS uses the straight line method of depreciation over the ADS recovery periods, which are generally longer than the GDS recovery periods. 2010 turbotax The ADS recovery periods for many assets used in the business of farming are listed in Table 7–1. 2010 turbotax Additional ADS recovery periods for other classes of property may be found in the Table of Class Lives and Recovery Periods in Appendix B of Publication 946. 2010 turbotax How Is the Depreciation Deduction Figured? To figure your depreciation deduction under MACRS, you first determine the depreciation system, property class, placed-in-service date, basis amount, recovery period, convention, and depreciation method that applies to your property. 2010 turbotax Then you are ready to figure your depreciation deduction. 2010 turbotax You can figure it in one of two ways. 2010 turbotax You can use the percentage tables provided by the IRS. 2010 turbotax You can figure your own deduction without using the tables. 2010 turbotax Figuring your own MACRS deduction will generally result in a slightly different amount than using the tables. 2010 turbotax Using the MACRS Percentage Tables To help you figure your deduction under MACRS, the IRS has established percentage tables that incorporate the applicable convention and depreciation method. 2010 turbotax These percentage tables are in Appendix A of Publication 946. 2010 turbotax Rules for using the tables. 2010 turbotax   The following rules cover the use of the percentage tables. 2010 turbotax You must apply the rates in the percentage tables to your property's unadjusted basis. 2010 turbotax Unadjusted basis is the same basis amount you would use to figure gain on a sale but figured without reducing your original basis by any MACRS depreciation taken in earlier years. 2010 turbotax You cannot use the percentage tables for a short tax year. 2010 turbotax See chapter 4 of Publication 946 for information on how to figure the deduction for a short tax year. 2010 turbotax You generally must continue to use them for the entire recovery period of the property. 2010 turbotax You must stop using the tables if you adjust the basis of the property for any reason other than— Depreciation allowed or allowable, or An addition or improvement to the property, which is depreciated as a separate property. 2010 turbotax Basis adjustment due to casualty loss. 2010 turbotax   If you reduce the basis of your property because of a casualty, you cannot continue to use the percentage tables. 2010 turbotax For the year of the adjustment and the remaining recovery period, you must figure the depreciation yourself using the property's adjusted basis at the end of the year. 2010 turbotax See Figuring the Deduction Without Using the Tables in chapter 4 of Publication 946. 2010 turbotax Figuring depreciation using the 150% DB method and half-year convention. 2010 turbotax    Table 7-2 has the percentages for 3-, 5-, 7-, and 20-year property. 2010 turbotax The percentages are based on the 150% declining balance method with a change to the straight line method. 2010 turbotax This table covers only the half-year convention and the first 8 years for 20-year property. 2010 turbotax See Appendix A in Publication 946 for complete MACRS tables, including tables for the mid-quarter and mid-month convention. 2010 turbotax   The following examples show how to figure depreciation under MACRS using the percentages in Table 7-2 . 2010 turbotax Example 1. 2010 turbotax During the year, you bought an item of 7-year property for $10,000 and placed it in service. 2010 turbotax You do not elect a section 179 expense deduction for this property. 2010 turbotax In addition, the property is not qualified property for purposes of the special depreciation allowance. 2010 turbotax The unadjusted basis of the property is $10,000. 2010 turbotax You use the percentages in Table 7-2 to figure your deduction. 2010 turbotax Since this is 7-year property, you multiply $10,000 by 10. 2010 turbotax 71% to get this year's depreciation of $1,071. 2010 turbotax For next year, your depreciation will be $1,913 ($10,000 × 19. 2010 turbotax 13%). 2010 turbotax Example 2. 2010 turbotax You had a barn constructed on your farm at a cost of $20,000. 2010 turbotax You placed the barn in service this year. 2010 turbotax You elect not to claim the special depreciation allowance. 2010 turbotax The barn is 20-year property and you use the table percentages to figure your deduction. 2010 turbotax You figure this year's depreciation by multiplying $20,000 (unadjusted basis) by 3. 2010 turbotax 75% to get $750. 2010 turbotax For next year, your depreciation will be $1,443. 2010 turbotax 80 ($20,000 × 7. 2010 turbotax 219%). 2010 turbotax Table 7-2. 2010 turbotax 150% Declining Balance Method (Half-Year Convention) Year 3-Year 5-Year 7-Year 20-Year 1 25. 2010 turbotax 0 % 15. 2010 turbotax 00 % 10. 2010 turbotax 71 % 3. 2010 turbotax 750 % 2 37. 2010 turbotax 5   25. 2010 turbotax 50   19. 2010 turbotax 13   7. 2010 turbotax 219   3 25. 2010 turbotax 0   17. 2010 turbotax 85   15. 2010 turbotax 03   6. 2010 turbotax 677   4 12. 2010 turbotax 5   16. 2010 turbotax 66   12. 2010 turbotax 25   6. 2010 turbotax 177   5     16. 2010 turbotax 66   12. 2010 turbotax 25   5. 2010 turbotax 713   6     8. 2010 turbotax 33   12. 2010 turbotax 25   5. 2010 turbotax 285   7         12. 2010 turbotax 25   4. 2010 turbotax 888   8         6. 2010 turbotax 13   4. 2010 turbotax 522   Figuring depreciation using the straight line method and half-year convention. 2010 turbotax   The following table has the straight line percentages for 3-, 5-, 7-, and 20-year property using the half-year convention. 2010 turbotax The table covers only the first 8 years for 20-year property. 2010 turbotax See Appendix A in Publication 946 for complete MACRS tables, including tables for the mid-quarter and mid-month convention. 2010 turbotax Table 7-3. 2010 turbotax Straight Line Method (Half-Year Convention) Year 3-Year 5-Year 7-Year 20-Year 1 16. 2010 turbotax 67 % 10 % 7. 2010 turbotax 14 % 2. 2010 turbotax 5 % 2 33. 2010 turbotax 33   20   14. 2010 turbotax 29   5. 2010 turbotax 0   3 33. 2010 turbotax 33   20   14. 2010 turbotax 29   5. 2010 turbotax 0   4 16. 2010 turbotax 67   20   14. 2010 turbotax 28   5. 2010 turbotax 0   5     20   14. 2010 turbotax 29   5. 2010 turbotax 0   6     10   14. 2010 turbotax 28   5. 2010 turbotax 0   7         14. 2010 turbotax 29   5. 2010 turbotax 0   8         7. 2010 turbotax 14   5. 2010 turbotax 0