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Where To Find State Tax Forms

Where to find state tax forms 2. Where to find state tax forms   Depreciation of Rental Property Table of Contents The BasicsWhat Rental Property Can Be Depreciated? When Does Depreciation Begin and End? Depreciation Methods Basis of Depreciable Property Claiming the Special Depreciation Allowance MACRS DepreciationDepreciation Systems Property Classes Under GDS Recovery Periods Under GDS Conventions Figuring Your Depreciation Deduction Figuring MACRS Depreciation Under ADS Claiming the Correct Amount of Depreciation You recover the cost of income producing property through yearly tax deductions. Where to find state tax forms You do this by depreciating the property; that is, by deducting some of the cost each year on your tax return. Where to find state tax forms Three factors determine how much depreciation you can deduct each year: (1) your basis in the property, (2) the recovery period for the property, and (3) the depreciation method used. Where to find state tax forms You cannot simply deduct your mortgage or principal payments, or the cost of furniture, fixtures and equipment, as an expense. Where to find state tax forms You can deduct depreciation only on the part of your property used for rental purposes. Where to find state tax forms Depreciation reduces your basis for figuring gain or loss on a later sale or exchange. Where to find state tax forms You may have to use Form 4562 to figure and report your depreciation. Where to find state tax forms See Which Forms To Use in chapter 3. Where to find state tax forms Also see Publication 946. Where to find state tax forms Section 179 deduction. Where to find state tax forms   The section 179 deduction is a means of recovering part or all of the cost of certain qualifying property in the year you place the property in service. Where to find state tax forms This deduction is not allowed for property used in connection with residential rental property. Where to find state tax forms See chapter 2 of Publication 946. Where to find state tax forms Alternative minimum tax (AMT). Where to find state tax forms   If you use accelerated depreciation, you may be subject to the AMT. Where to find state tax forms Accelerated depreciation allows you to deduct more depreciation earlier in the recovery period than you could deduct using a straight line method (same deduction each year). Where to find state tax forms   The prescribed depreciation methods for rental real estate are not accelerated, so the depreciation deduction is not adjusted for the AMT. Where to find state tax forms However, accelerated methods are generally used for other property connected with rental activities (for example, appliances and wall-to-wall carpeting). Where to find state tax forms   To find out if you are subject to the AMT, see the Instructions for Form 6251. Where to find state tax forms The Basics The following section discusses the information you will need to have about the rental property and the decisions to be made before figuring your depreciation deduction. Where to find state tax forms What Rental Property Can Be Depreciated? You can depreciate your property if it meets all the following requirements. Where to find state tax forms You own the property. Where to find state tax forms You use the property in your business or income-producing activity (such as rental property). Where to find state tax forms The property has a determinable useful life. Where to find state tax forms The property is expected to last more than one year. Where to find state tax forms Property you own. Where to find state tax forms   To claim depreciation, you usually must be the owner of the property. Where to find state tax forms You are considered as owning property even if it is subject to a debt. Where to find state tax forms Rented property. Where to find state tax forms   Generally, if you pay rent for property, you cannot depreciate that property. Where to find state tax forms Usually, only the owner can depreciate it. Where to find state tax forms However, if you make permanent improvements to leased property, you may be able to depreciate the improvements. Where to find state tax forms See Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. Where to find state tax forms Cooperative apartments. Where to find state tax forms   If you are a tenant-stockholder in a cooperative housing corporation and rent your cooperative apartment to others, you can deduct depreciation on your stock in the corporation. Where to find state tax forms See chapter 4, Special Situations. Where to find state tax forms Property having a determinable useful life. Where to find state tax forms   To be depreciable, your property must have a determinable useful life. Where to find state tax forms This means that it must be something that wears out, decays, gets used up, becomes obsolete, or loses its value from natural causes. Where to find state tax forms What Rental Property Cannot Be Depreciated? Certain property cannot be depreciated. Where to find state tax forms This includes land and certain excepted property. Where to find state tax forms Land. Where to find state tax forms   You cannot depreciate the cost of land because land generally does not wear out, become obsolete, or get used up. Where to find state tax forms But if it does, the loss is accounted for upon disposition. Where to find state tax forms The costs of clearing, grading, planting, and landscaping are usually all part of the cost of land and cannot be depreciated. Where to find state tax forms   Although you cannot depreciate land, you can depreciate certain land preparation costs, such as landscaping costs, incurred in preparing land for business use. Where to find state tax forms These costs must be so closely associated with other depreciable property that you can determine a life for them along with the life of the associated property. Where to find state tax forms Example. Where to find state tax forms You built a new house to use as a rental and paid for grading, clearing, seeding, and planting bushes and trees. Where to find state tax forms Some of the bushes and trees were planted right next to the house, while others were planted around the outer border of the lot. Where to find state tax forms If you replace the house, you would have to destroy the bushes and trees right next to it. Where to find state tax forms These bushes and trees are closely associated with the house, so they have a determinable useful life. Where to find state tax forms Therefore, you can depreciate them. Where to find state tax forms Add your other land preparation costs to the basis of your land because they have no determinable life and you cannot depreciate them. Where to find state tax forms Excepted property. Where to find state tax forms   Even if the property meets all the requirements listed earlier under What Rental Property Can Be Depreciated , you cannot depreciate the following property. Where to find state tax forms Property placed in service and disposed of (or taken out of business use) in the same year. Where to find state tax forms Equipment used to build capital improvements. Where to find state tax forms You must add otherwise allowable depreciation on the equipment during the period of construction to the basis of your improvements. Where to find state tax forms For more information, see chapter 1 of Publication 946. Where to find state tax forms When Does Depreciation Begin and End? You begin to depreciate your rental property when you place it in service for the production of income. Where to find state tax forms You stop depreciating it either when you have fully recovered your cost or other basis, or when you retire it from service, whichever happens first. Where to find state tax forms Placed in Service You place property in service in a rental activity when it is ready and available for a specific use in that activity. Where to find state tax forms Even if you are not using the property, it is in service when it is ready and available for its specific use. Where to find state tax forms Example 1. Where to find state tax forms On November 22 of last year, you purchased a dishwasher for your rental property. Where to find state tax forms The appliance was delivered on December 7, but was not installed and ready for use until January 3 of this year. Where to find state tax forms Because the dishwasher was not ready for use last year, it is not considered placed in service until this year. Where to find state tax forms If the appliance had been installed and ready for use when it was delivered in December of last year, it would have been considered placed in service in December, even if it was not actually used until this year. Where to find state tax forms Example 2. Where to find state tax forms On April 6, you purchased a house to use as residential rental property. Where to find state tax forms You made extensive repairs to the house and had it ready for rent on July 5. Where to find state tax forms You began to advertise the house for rent in July and actually rented it beginning September 1. Where to find state tax forms The house is considered placed in service in July when it was ready and available for rent. Where to find state tax forms You can begin to depreciate the house in July. Where to find state tax forms Example 3. Where to find state tax forms You moved from your home in July. Where to find state tax forms During August and September you made several repairs to the house. Where to find state tax forms On October 1, you listed the property for rent with a real estate company, which rented it on December 1. Where to find state tax forms The property is considered placed in service on October 1, the date when it was available for rent. Where to find state tax forms Conversion to business use. Where to find state tax forms   If you place property in service in a personal activity, you cannot claim depreciation. Where to find state tax forms However, if you change the property's use to business or the production of income, you can begin to depreciate it at the time of the change. Where to find state tax forms You place the property in service for business or income-producing use on the date of the change. Where to find state tax forms Example. Where to find state tax forms You bought a house and used it as your personal home several years before you converted it to rental property. Where to find state tax forms Although its specific use was personal and no depreciation was allowable, you placed the home in service when you began using it as your home. Where to find state tax forms You can begin to claim depreciation in the year you converted it to rental property because at that time its use changed to the production of income. Where to find state tax forms Idle Property Continue to claim a deduction for depreciation on property used in your rental activity even if it is temporarily idle (not in use). Where to find state tax forms For example, if you must make repairs after a tenant moves out, you still depreciate the rental property during the time it is not available for rent. Where to find state tax forms Cost or Other Basis Fully Recovered You must stop depreciating property when the total of your yearly depreciation deductions equals your cost or other basis of your property. Where to find state tax forms For this purpose, your yearly depreciation deductions include any depreciation that you were allowed to claim, even if you did not claim it. Where to find state tax forms See Basis of Depreciable Property , later. Where to find state tax forms 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. Where to find state tax forms 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. Where to find state tax forms You sell or exchange the property. Where to find state tax forms You convert the property to personal use. Where to find state tax forms You abandon the property. Where to find state tax forms The property is destroyed. Where to find state tax forms Depreciation Methods Generally, you must use the Modified Accelerated Cost Recovery System (MACRS) to depreciate residential rental property placed in service after 1986. Where to find state tax forms If you placed rental property in service before 1987, you are using one of the following methods. Where to find state tax forms ACRS (Accelerated Cost Recovery System) for property placed in service after 1980 but before 1987. Where to find state tax forms Straight line or declining balance method over the useful life of property placed in service before 1981. Where to find state tax forms See MACRS Depreciation , later, for more information. Where to find state tax forms Rental property placed in service before 2013. Where to find state tax forms   Continue to use the same method of figuring depreciation that you used in the past. Where to find state tax forms Use of real property changed. Where to find state tax forms   Generally, you must use MACRS to depreciate real property that you acquired for personal use before 1987 and changed to business or income-producing use after 1986. Where to find state tax forms This includes your residence that you changed to rental use. Where to find state tax forms See Property Owned or Used in 1986 in Publication 946, chapter 1, for those situations in which MACRS is not allowed. Where to find state tax forms Improvements made after 1986. Where to find state tax forms   Treat an improvement made after 1986 to property you placed in service before 1987 as separate depreciable property. Where to find state tax forms As a result, you can depreciate that improvement as separate property under MACRS if it is the type of property that otherwise qualifies for MACRS depreciation. Where to find state tax forms For more information about improvements, see Additions or improvements to property , later in this chapter under Recovery Periods Under GDS. Where to find state tax forms This publication discusses MACRS depreciation only. Where to find state tax forms If you need information about depreciating property placed in service before 1987, see Publication 534. Where to find state tax forms Basis of Depreciable Property The basis of property used in a rental activity is generally its adjusted basis when you place it in service in that activity. Where to find state tax forms This is its cost or other basis when you acquired it, adjusted for certain items occurring before you place it in service in the rental activity. Where to find state tax forms If you depreciate your property under MACRS, you may also have to reduce your basis by certain deductions and credits with respect to the property. Where to find state tax forms Basis and adjusted basis are explained in the following discussions. Where to find state tax forms If you used the property for personal purposes before changing it to rental use, its basis for depreciation is the lesser of its adjusted basis or its fair market value when you change it to rental use. Where to find state tax forms See Basis of Property Changed to Rental Use in chapter 4. Where to find state tax forms Cost Basis The basis of property you buy is usually its cost. Where to find state tax forms The cost is the amount you pay for it in cash, in debt obligation, in other property, or in services. Where to find state tax forms Your cost also includes amounts you pay for: Sales tax charged on the purchase (but see Exception next), Freight charges to obtain the property, and Installation and testing charges. Where to find state tax forms Exception. Where to find state tax forms   If you deducted state and local general sales taxes as an itemized deduction on Schedule A (Form 1040), do not include those sales taxes as part of your cost basis. Where to find state tax forms Such taxes were deductible before 1987 and after 2003. Where to find state tax forms Loans with low or no interest. Where to find state tax forms   If you buy property on any time-payment plan that charges little or no interest, the basis of your property is your stated purchase price, less the amount considered to be unstated interest. Where to find state tax forms See Unstated Interest and Original Issue Discount (OID) in Publication 537, Installment Sales. Where to find state tax forms Real property. Where to find state tax forms   If you buy real property, such as a building and land, certain fees and other expenses you pay are part of your cost basis in the property. Where to find state tax forms Real estate taxes. Where to find state tax forms   If you buy real property and agree to pay real estate taxes on it that were owed by the seller and the seller does not reimburse you, the taxes you pay are treated as part of your basis in the property. Where to find state tax forms You cannot deduct them as taxes paid. Where to find state tax forms   If you reimburse the seller for real estate taxes the seller paid for you, you can usually deduct that amount. Where to find state tax forms Do not include that amount in your basis in the property. Where to find state tax forms Settlement fees and other costs. Where to find state tax forms   The following settlement fees and closing costs for buying the property are part of your basis in the property. Where to find state tax forms Abstract fees. Where to find state tax forms Charges for installing utility services. Where to find state tax forms Legal fees. Where to find state tax forms Recording fees. Where to find state tax forms Surveys. Where to find state tax forms Transfer taxes. Where to find state tax forms Title insurance. Where to find state tax forms Any amounts the seller owes that you agree to pay, such as back taxes or interest, recording or mortgage fees, charges for improvements or repairs, and sales commissions. Where to find state tax forms   The following are settlement fees and closing costs you cannot include in your basis in the property. Where to find state tax forms Fire insurance premiums. Where to find state tax forms Rent or other charges relating to occupancy of the property before closing. Where to find state tax forms Charges connected with getting or refinancing a loan, such as: Points (discount points, loan origination fees), Mortgage insurance premiums, Loan assumption fees, Cost of a credit report, and Fees for an appraisal required by a lender. Where to find state tax forms   Also, do not include amounts placed in escrow for the future payment of items such as taxes and insurance. Where to find state tax forms Assumption of a mortgage. Where to find state tax forms   If you buy property and become liable for an existing mortgage on the property, your basis is the amount you pay for the property plus the amount remaining to be paid on the mortgage. Where to find state tax forms Example. Where to find state tax forms You buy a building for $60,000 cash and assume a mortgage of $240,000 on it. Where to find state tax forms Your basis is $300,000. Where to find state tax forms Separating cost of land and buildings. Where to find state tax forms   If you buy buildings and your cost includes the cost of the land on which they stand, you must divide the cost between the land and the buildings to figure the basis for depreciation of the buildings. Where to find state tax forms The part of the cost that you allocate to each asset is the ratio of the fair market value of that asset to the fair market value of the whole property at the time you buy it. Where to find state tax forms   If you are not certain of the fair market values of the land and the buildings, you can divide the cost between them based on their assessed values for real estate tax purposes. Where to find state tax forms Example. Where to find state tax forms You buy a house and land for $200,000. Where to find state tax forms The purchase contract does not specify how much of the purchase price is for the house and how much is for the land. Where to find state tax forms The latest real estate tax assessment on the property was based on an assessed value of $160,000, of which $136,000 was for the house and $24,000 was for the land. Where to find state tax forms You can allocate 85% ($136,000 ÷ $160,000) of the purchase price to the house and 15% ($24,000 ÷ $160,000) of the purchase price to the land. Where to find state tax forms Your basis in the house is $170,000 (85% of $200,000) and your basis in the land is $30,000 (15% of $200,000). Where to find state tax forms Basis Other Than Cost You cannot use cost as a basis for property that you received: In return for services you performed; In an exchange for other property; As a gift; From your spouse, or from your former spouse as the result of a divorce; or As an inheritance. Where to find state tax forms If you received property in one of these ways, see Publication 551 for information on how to figure your basis. Where to find state tax forms Adjusted Basis To figure 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 for business or the production of income. Where to find state tax forms The result of these adjustments to the basis is the adjusted basis. Where to find state tax forms Increases to basis. Where to find state tax forms   You must increase the basis of any property by the cost of all items properly added to a capital account. Where to find state tax forms These include the following. Where to find state tax forms The cost of any additions or improvements made before placing your property into service as a rental that have a useful life of more than 1 year. Where to find state tax forms Amounts spent after a casualty to restore the damaged property. Where to find state tax forms The cost of extending utility service lines to the property. Where to find state tax forms Legal fees, such as the cost of defending and perfecting title, or settling zoning issues. Where to find state tax forms Additions or improvements. Where to find state tax forms   Add to the basis of your property the amount an addition or improvement actually cost you, including any amount you borrowed to make the addition or improvement. Where to find state tax forms This includes all direct costs, such as material and labor, but does not include your own labor. Where to find state tax forms It also includes all expenses related to the addition or improvement. Where to find state tax forms   For example, if you had an architect draw up plans for remodeling your property, the architect's fee is a part of the cost of the remodeling. Where to find state tax forms Or, if you had your lot surveyed to put up a fence, the cost of the survey is a part of the cost of the fence. Where to find state tax forms   Keep separate accounts for depreciable additions or improvements made after you place the property in service in your rental activity. Where to find state tax forms For information on depreciating additions or improvements, see Additions or improvements to property , later in this chapter, under Recovery Periods Under GDS. Where to find state tax forms    The cost of landscaping improvements is usually treated as an addition to the basis of the land, which is not depreciable. Where to find state tax forms However, see What Rental Property Cannot Be Depreciated, earlier. Where to find state tax forms Assessments for local improvements. Where to find state tax forms   Assessments for items which tend to increase the value of property, such as streets and sidewalks, must be added to the basis of the property. Where to find state tax forms For example, if your city installs curbing on the street in front of your house, and assesses you and your neighbors for its cost, you must add the assessment to the basis of your property. Where to find state tax forms Also add the cost of legal fees paid to obtain a decrease in an assessment levied against property to pay for local improvements. Where to find state tax forms You cannot deduct these items as taxes or depreciate them. Where to find state tax forms    However, you can deduct as taxes, charges or assessments for maintenance, repairs, or interest charges related to the improvements. Where to find state tax forms Do not add them to your basis in the property. Where to find state tax forms Deducting vs. Where to find state tax forms capitalizing costs. Where to find state tax forms   Do not add to your basis costs you can deduct as current expenses. Where to find state tax forms However, there are certain costs you can choose either to deduct or to capitalize. Where to find state tax forms If you capitalize these costs, include them in your basis. Where to find state tax forms If you deduct them, do not include them in your basis. Where to find state tax forms   The costs you may choose to deduct or capitalize include carrying charges, such as interest and taxes, that you must pay to own property. Where to find state tax forms   For more information about deducting or capitalizing costs and how to make the election, see Carrying Charges in Publication 535, chapter 7. Where to find state tax forms Decreases to basis. Where to find state tax forms   You must decrease the basis of your property by any items that represent a return of your cost. Where to find state tax forms These include the following. Where to find state tax forms Insurance or other payment you receive as the result of a casualty or theft loss. Where to find state tax forms Casualty loss not covered by insurance for which you took a deduction. Where to find state tax forms Amount(s) you receive for granting an easement. Where to find state tax forms Residential energy credits you were allowed before 1986, or after 2005, if you added the cost of the energy items to the basis of your home. Where to find state tax forms Exclusion from income of subsidies for energy conservation measures. Where to find state tax forms Special depreciation allowance claimed on qualified property. Where to find state tax forms Depreciation you deducted, or could have deducted, on your tax returns under the method of depreciation you chose. Where to find state tax forms If you did not deduct enough or deducted too much in any year, see Depreciation under Decreases to Basis in Publication 551. Where to find state tax forms   If your rental property was previously used as your main home, you must also decrease the basis by the following. Where to find state tax forms Gain you postponed from the sale of your main home before May 7, 1997, if the replacement home was converted to your rental property. Where to find state tax forms District of Columbia first-time homebuyer credit allowed on the purchase of your main home after August 4, 1997 and before January 1, 2012. Where to find state tax forms Amount of qualified principal residence indebtedness discharged on or after January 1, 2007. Where to find state tax forms Claiming the Special Depreciation Allowance For 2013, your residential rental property may qualify for a special depreciation allowance. Where to find state tax forms This allowance is figured before you figure your regular depreciation deduction. Where to find state tax forms See Publication 946, chapter 3, for details. Where to find state tax forms Also see the Instructions for Form 4562, Line 14. Where to find state tax forms If you qualify for, but choose not to take, a special depreciation allowance, you must attach a statement to your return. Where to find state tax forms The details of this election are in Publication 946, chapter 3, and the Instructions for Form 4562, Line 14. Where to find state tax forms MACRS Depreciation Most business and investment property placed in service after 1986 is depreciated using MACRS. Where to find state tax forms This section explains how to determine which MACRS depreciation system applies to your property. Where to find state tax forms It also discusses other information you need to know before you can figure depreciation under MACRS. Where to find state tax forms This information includes the property's: Recovery class, Applicable recovery period, Convention, Placed-in-service date, Basis for depreciation, and Depreciation method. Where to find state tax forms Depreciation Systems MACRS consists of two systems that determine how you depreciate your property—the General Depreciation System (GDS) and the Alternative Depreciation System (ADS). Where to find state tax forms You must use GDS unless you are specifically required by law to use ADS or you elect to use ADS. Where to find state tax forms Excluded Property You cannot use MACRS for certain personal property (such as furniture or appliances) placed in service in your rental property in 2013 if it had been previously placed in service before 1987 when MACRS became effective. Where to find state tax forms In most cases, personal property is excluded from MACRS if you (or a person related to you) owned or used it in 1986 or if your tenant is a person (or someone related to the person) who owned or used it in 1986. Where to find state tax forms However, the property is not excluded if your 2013 deduction under MACRS (using a half-year convention) is less than the deduction you would have under ACRS. Where to find state tax forms For more information, see What Method Can You Use To Depreciate Your Property? in Publication 946, chapter 1. Where to find state tax forms Electing ADS If you choose, you can use the ADS method for most property. Where to find state tax forms Under ADS, you use the straight line method of depreciation. Where to find state tax forms The election of ADS for one item in a class of property generally applies to all property in that class that is placed in service during the tax year of the election. Where to find state tax forms However, the election applies on a property-by-property basis for residential rental property and nonresidential real property. Where to find state tax forms If you choose to use ADS for your residential rental property, the election must be made in the first year the property is placed in service. Where to find state tax forms Once you make this election, you can never revoke it. Where to find state tax forms For property placed in service during 2013, you make the election to use ADS by entering the depreciation on Form 4562, Part III, Section C, line 20c. Where to find state tax forms Property Classes Under GDS Each item of property that can be depreciated under MACRS is assigned to a property class, determined by its class life. Where to find state tax forms The property class generally determines the depreciation method, recovery period, and convention. Where to find state tax forms The property classes under GDS are: 3-year property, 5-year property, 7-year property, 10-year property, 15-year property, 20-year property, Nonresidential real property, and Residential rental property. Where to find state tax forms Under MACRS, property that you placed in service during 2013 in your rental activities generally falls into one of the following classes. Where to find state tax forms 5-year property. Where to find state tax forms This class includes computers and peripheral equipment, office machinery (typewriters, calculators, copiers, etc. Where to find state tax forms ), automobiles, and light trucks. Where to find state tax forms This class also includes appliances, carpeting, furniture, etc. Where to find state tax forms , used in a residential rental real estate activity. Where to find state tax forms Depreciation on automobiles, other property used for transportation, computers and related peripheral equipment, and property of a type generally used for entertainment, recreation, or amusement is limited. Where to find state tax forms See chapter 5 of Publication 946. Where to find state tax forms 7-year property. Where to find state tax forms This class includes office furniture and equipment (desks, file cabinets, etc. Where to find state tax forms ). Where to find state tax forms This class also includes any property that does not have a class life and that has not been designated by law as being in any other class. Where to find state tax forms 15-year property. Where to find state tax forms This class includes roads, fences, and shrubbery (if depreciable). Where to find state tax forms Residential rental property. Where to find state tax forms This class includes any real property that is a rental building or structure (including a mobile home) for which 80% or more of the gross rental income for the tax year is from dwelling units. Where to find state tax forms It does not include a unit in a hotel, motel, inn, or other establishment where more than half of the units are used on a transient basis. Where to find state tax forms If you live in any part of the building or structure, the gross rental income includes the fair rental value of the part you live in. Where to find state tax forms The other property classes do not generally apply to property used in rental activities. Where to find state tax forms These classes are not discussed in this publication. Where to find state tax forms See Publication 946 for more information. Where to find state tax forms Recovery Periods Under GDS The recovery period of property is the number of years over which you recover its cost or other basis. Where to find state tax forms The recovery periods are generally longer under ADS than GDS. Where to find state tax forms The recovery period of property depends on its property class. Where to find state tax forms Under GDS, the recovery period of an asset is generally the same as its property class. Where to find state tax forms Class lives and recovery periods for most assets are listed in Appendix B of Publication 946. Where to find state tax forms See Table 2-1 for recovery periods of property commonly used in residential rental activities. Where to find state tax forms Qualified Indian reservation property. Where to find state tax forms   Shorter recovery periods are provided under MACRS for qualified Indian reservation property placed in service on Indian reservations. Where to find state tax forms For more information, see chapter 4 of Publication 946. Where to find state tax forms Additions or improvements to property. Where to find state tax forms   Treat additions or improvements you make to your depreciable rental property as separate property items for depreciation purposes. Where to find state tax forms   The property class and recovery period of the addition or improvement is the one that would apply to the original property if you had placed it in service at the same time as the addition or improvement. Where to find state tax forms   The recovery period for an addition or improvement to property begins on the later of: The date the addition or improvement is placed in service, or The date the property to which the addition or improvement was made is placed in service. Where to find state tax forms Example. Where to find state tax forms You own a residential rental house that you have been renting since 1986 and depreciating under ACRS. Where to find state tax forms You built an addition onto the house and placed it in service in 2013. Where to find state tax forms You must use MACRS for the addition. Where to find state tax forms Under GDS, the addition is depreciated as residential rental property over 27. Where to find state tax forms 5 years. Where to find state tax forms Table 2-1. Where to find state tax forms MACRS Recovery Periods for Property Used in Rental Activities   MACRS Recovery Period   Type of Property General Depreciation System Alternative Depreciation System   Computers and their peripheral equipment 5 years 5 years   Office machinery, such as: Typewriters Calculators Copiers 5 years 6 years   Automobiles 5 years 5 years   Light trucks 5 years 5 years   Appliances, such as: Stoves Refrigerators 5 years 9 years   Carpets 5 years 9 years   Furniture used in rental property 5 years 9 years   Office furniture and equipment, such as: Desks Files 7 years 10 years   Any property that does not have a class life and that has not been designated by law as being in any other class 7 years 12 years   Roads 15 years 20 years   Shrubbery 15 years 20 years   Fences 15 years 20 years   Residential rental property (buildings or structures) and structural components such as furnaces, waterpipes, venting, etc. Where to find state tax forms 27. Where to find state tax forms 5 years 40 years   Additions and improvements, such as a new roof The same recovery period as that of the property to which the addition or improvement is made, determined as if the property were placed in service at the same time as the addition or improvement. Where to find state tax forms   Conventions A convention is a method established under MACRS to set the beginning and end of the recovery period. Where to find state tax forms 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. Where to find state tax forms Mid-month convention. Where to find state tax forms    A mid-month convention is used for all residential rental property and nonresidential real property. Where to find state tax forms Under this convention, you treat all property placed in service, or disposed of, during any month as placed in service, or disposed of, at the midpoint of that month. Where to find state tax forms Mid-quarter convention. Where to find state tax forms   A mid-quarter convention must be used if the mid-month convention does not apply and the total depreciable basis of MACRS property placed in service in the last 3 months of a tax year (excluding nonresidential real property, residential rental property, and property placed in service and disposed of in the same year) is more than 40% of the total basis of all such property you place in service during the year. Where to find state tax forms   Under this convention, you treat all property placed in service, or disposed of, during any quarter of a tax year as placed in service, or disposed of, at the midpoint of the quarter. Where to find state tax forms Example. Where to find state tax forms During the tax year, Tom Martin purchased the following items to use in his rental property. Where to find state tax forms He elects not to claim the special depreciation allowance discussed earlier. Where to find state tax forms A dishwasher for $400 that he placed in service in January. Where to find state tax forms Used furniture for $100 that he placed in service in September. Where to find state tax forms A refrigerator for $800 that he placed in service in October. Where to find state tax forms Tom uses the calendar year as his tax year. Where to find state tax forms The total basis of all property placed in service that year is $1,300. Where to find state tax forms The $800 basis of the refrigerator placed in service during the last 3 months of his tax year exceeds $520 (40% × $1,300). Where to find state tax forms Tom must use the mid-quarter convention instead of the half-year convention for all three items. Where to find state tax forms Half-year convention. Where to find state tax forms    The half-year convention is used if neither the mid-quarter convention nor the mid-month convention applies. Where to find state tax forms Under this convention, you treat all property placed in service, or disposed of, during a tax year as placed in service, or disposed of, at the midpoint of that tax year. Where to find state tax forms   If this convention applies, you deduct a half year of depreciation for the first year and the last year that you depreciate the property. Where to find state tax forms You deduct a full year of depreciation for any other year during the recovery period. Where to find state tax forms Figuring Your Depreciation Deduction You can figure your MACRS depreciation deduction in one of two ways. Where to find state tax forms The deduction is substantially the same both ways. Where to find state tax forms You can either: Actually compute the deduction using the depreciation method and convention that apply over the recovery period of the property, or Use the percentage from the MACRS percentage tables. Where to find state tax forms In this publication we will use the percentage tables. Where to find state tax forms For instructions on how to compute the deduction, see chapter 4 of Publication 946. Where to find state tax forms Residential rental property. Where to find state tax forms   You must use the straight line method and a mid-month convention for residential rental property. Where to find state tax forms In the first year that you claim depreciation for residential rental property, you can claim depreciation only for the number of months the property is in use, and you must use the mid-month convention (explained under Conventions , earlier). Where to find state tax forms 5-, 7-, or 15-year property. Where to find state tax forms   For property in the 5- or 7-year class, use the 200% declining balance method and a half-year convention. Where to find state tax forms However, in limited cases you must use the mid-quarter convention, if it applies. Where to find state tax forms For property in the 15-year class, use the 150% declining balance method and a half-year convention. Where to find state tax forms   You can also choose to use the 150% declining balance method for property in the 5- or 7-year class. Where to find state tax forms The choice to use the 150% method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. Where to find state tax forms You make this election on Form 4562. Where to find state tax forms In Part III, column (f), enter “150 DB. Where to find state tax forms ” Once you make this election, you cannot change to another method. Where to find state tax forms   If you use either the 200% or 150% declining balance method, you figure your deduction using the straight line method in the first tax year that the straight line method gives you an equal or larger deduction. Where to find state tax forms   You can also choose to use the straight line method with a half-year or mid-quarter convention for 5-, 7-, or 15-year property. Where to find state tax forms The choice to use the straight line method for one item in a class of property applies to all property in that class that is placed in service during the tax year of the election. Where to find state tax forms You elect the straight line method on Form 4562. Where to find state tax forms In Part III, column (f), enter “S/L. Where to find state tax forms ” Once you make this election, you cannot change to another method. Where to find state tax forms MACRS Percentage Tables You can use the percentages in Table 2-2, earlier, to compute annual depreciation under MACRS. Where to find state tax forms The tables show the percentages for the first few years or until the change to the straight line method is made. Where to find state tax forms See Appendix A of Publication 946 for complete tables. Where to find state tax forms The percentages in Tables 2-2a, 2-2b, and 2-2c make the change from declining balance to straight line in the year that straight line will give a larger deduction. Where to find state tax forms If you elect to use the straight line method for 5-, 7-, or 15-year property, or the 150% declining balance method for 5- or 7-year property, use the tables in Appendix A of Publication 946. Where to find state tax forms How to use the percentage tables. Where to find state tax forms   You must apply the table rates to your property's unadjusted basis (defined below) each year of the recovery period. Where to find state tax forms   Once you begin using a percentage table to figure depreciation, you must continue to use it for the entire recovery period unless there is an adjustment to the basis of your property for a reason other than: Depreciation allowed or allowable, or An addition or improvement that is depreciated as a separate item of property. Where to find state tax forms   If there is an adjustment for any reason other than (1) or (2), for example, because of a deductible casualty loss, you can no longer use the table. Where to find state tax forms For the year of the adjustment and for the remaining recovery period, figure depreciation using the property's adjusted basis at the end of the year and the appropriate depreciation method, as explained earlier under Figuring Your Depreciation Deduction . Where to find state tax forms See Figuring the Deduction Without Using the Tables in Publication 946, chapter 4. Where to find state tax forms Unadjusted basis. Where to find state tax forms   This is the same basis you would use to figure gain on a sale (see Basis of Depreciable Property , earlier), but without reducing your original basis by any MACRS depreciation taken in earlier years. Where to find state tax forms   However, you do reduce your original basis by other amounts claimed on the property, including: Any amortization, Any section 179 deduction, and Any special depreciation allowance. Where to find state tax forms For more information, see chapter 4 of Publication 946. Where to find state tax forms Please click here for the text description of the image. Where to find state tax forms Table 2-2 Tables 2-2a, 2-2b, and 2-2c. Where to find state tax forms   The percentages in these tables take into account the half-year and mid-quarter conventions. Where to find state tax forms Use Table 2-2a for 5-year property, Table 2-2b for 7-year property, and Table 2-2c for 15-year property. Where to find state tax forms Use the percentage in the second column (half-year convention) unless you are required to use the mid-quarter convention (explained earlier). Where to find state tax forms If you must use the mid-quarter convention, use the column that corresponds to the calendar year quarter in which you placed the property in service. Where to find state tax forms Example 1. Where to find state tax forms You purchased a stove and refrigerator and placed them in service in June. Where to find state tax forms Your basis in the stove is $600 and your basis in the refrigerator is $1,000. Where to find state tax forms Both are 5-year property. Where to find state tax forms Using the half-year convention column in Table 2-2a, the depreciation percentage for Year 1 is 20%. Where to find state tax forms For that year your depreciation deduction is $120 ($600 × . Where to find state tax forms 20) for the stove and $200 ($1,000 × . Where to find state tax forms 20) for the refrigerator. Where to find state tax forms For Year 2, the depreciation percentage is 32%. Where to find state tax forms That year's depreciation deduction will be $192 ($600 × . Where to find state tax forms 32) for the stove and $320 ($1,000 × . Where to find state tax forms 32) for the refrigerator. Where to find state tax forms Example 2. Where to find state tax forms Assume the same facts as in Example 1, except you buy the refrigerator in October instead of June. Where to find state tax forms Since the refrigerator was placed in service in the last 3 months of the tax year, and its basis ($1,000) is more than 40% of the total basis of all property placed in service during the year ($1,600 × . Where to find state tax forms 40 = $640), you are required to use the mid-quarter convention to figure depreciation on both the stove and refrigerator. Where to find state tax forms Because you placed the refrigerator in service in October, you use the fourth quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 5%. Where to find state tax forms Your depreciation deduction for the refrigerator is $50 ($1,000 x . Where to find state tax forms 05). Where to find state tax forms Because you placed the stove in service in June, you use the second quarter column of Table 2-2a and find the depreciation percentage for Year 1 is 25%. Where to find state tax forms For that year, your depreciation deduction for the stove is $150 ($600 x . Where to find state tax forms 25). Where to find state tax forms Table 2-2d. Where to find state tax forms    Use this table when you are using the GDS 27. Where to find state tax forms 5 year option for residential rental property. Where to find state tax forms Find the row for the month that you placed the property in service. Where to find state tax forms Use the percentages listed for that month to figure your depreciation deduction. Where to find state tax forms The mid-month convention is taken into account in the percentages shown in the table. Where to find state tax forms Continue to use the same row (month) under the column for the appropriate year. Where to find state tax forms Example. Where to find state tax forms You purchased a single family rental house for $185,000 and placed it in service on February 8. Where to find state tax forms The sales contract showed that the building cost $160,000 and the land cost $25,000. Where to find state tax forms Your basis for depreciation is its original cost, $160,000. Where to find state tax forms This is the first year of service for your residential rental property and you decide to use GDS which has a recovery period of 27. Where to find state tax forms 5 years. Where to find state tax forms Using Table 2-2d, you find that the percentage for property placed in service in February of Year 1 is 3. Where to find state tax forms 182%. Where to find state tax forms That year's depreciation deduction is $5,091 ($160,000 x . Where to find state tax forms 03182). Where to find state tax forms Figuring MACRS Depreciation Under ADS Table 2–1, earlier, shows the ADS recovery periods for property used in rental activities. Where to find state tax forms See Appendix B in Publication 946 for other property. Where to find state tax forms If your property is not listed in Appendix B, it is considered to have no class life. Where to find state tax forms Under ADS, personal property with no class life is depreciated using a recovery period of 12 years. Where to find state tax forms Use the mid-month convention for residential rental property and nonresidential real property. Where to find state tax forms For all other property, use the half-year or mid-quarter convention, as appropriate. Where to find state tax forms See Publication 946 for ADS depreciation tables. Where to find state tax forms Claiming the Correct Amount of Depreciation You should claim the correct amount of depreciation each tax year. Where to find state tax forms If you did not claim all the depreciation you were entitled to deduct, you must still reduce your basis in the property by the full amount of depreciation that you could have deducted. Where to find state tax forms For more information, see Depreciation under Decreases to Basis in Publication 551. Where to find state tax forms If you deducted an incorrect amount of depreciation for property in any year, you may be able to make a correction by filing Form 1040X, Amended U. Where to find state tax forms S. Where to find state tax forms Individual Income Tax Return. Where to find state tax forms If you are not allowed to make the correction on an amended return, you can change your accounting method to claim the correct amount of depreciation. Where to find state tax forms Filing an amended return. Where to find state tax forms   You can file an amended return to correct the amount of depreciation claimed for any property in any of the following situations. Where to find state tax forms You claimed the incorrect amount because of a mathematical error made in any year. Where to find state tax forms You claimed the incorrect amount because of a posting error made in any year. Where to find state tax forms You have not adopted a method of accounting for property placed in service by you in tax years ending after December 29, 2003. Where to find state tax forms You claimed the incorrect amount on property placed in service by you in tax years ending before December 30, 2003. Where to find state tax forms   Generally, you adopt a method of accounting for depreciation by using a permissible method of determining depreciation when you file your first tax return for the property used in your rental activity. Where to find state tax forms This also occurs when you use the same impermissible method of determining depreciation (for example, using the wrong MACRS recovery period) in two or more consecutively filed tax returns. Where to find state tax forms   If an amended return is allowed, you must file it by the later of the following dates. Where to find state tax forms 3 years from the date you filed your original return for the year in which you did not deduct the correct amount. Where to find state tax forms A return filed before an unextended due date is considered filed on that due date. Where to find state tax forms 2 years from the time you paid your tax for that year. Where to find state tax forms Changing your accounting method. Where to find state tax forms   To change your accounting method, you generally must file Form 3115, Application for Change in Accounting Method, to get the consent of the IRS. Where to find state tax forms In some instances, that consent is automatic. Where to find state tax forms For more information, see Changing Your Accounting Method in Publication 946,  chapter 1. Where to find state tax forms Prev  Up  Next   Home   More Online Publications
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Contact My Local Office in South Carolina

Face-to-face Tax Help

IRS Taxpayer Assistance Centers (TACs) are your source for personal tax help when you believe your tax issue can only be handled face-to-face. No appointment is necessary.

Keep in mind, many questions can be resolved online without waiting in line. Through IRS.gov you can:
• Set up a payment plan.
• Get a transcript of your tax return.
• Make a payment.
• Check on your refund.
• Find answers to many of your tax questions.

We are now referring all requests for tax return preparation services to other available resources. You can take advantage of free tax preparation through Free File, Free File Fillable Forms or through a volunteer site in your community. To find the nearest volunteer site location or to get more information about Free File, go to the top of the page and enter “Free Tax Help” in the Search box.

If you have a tax account issues and feel that it requires talking with someone face-to-face, visit your local TAC.

Caution:  Many of our offices are located in Federal Office Buildings. These buildings may not allow visitors to bring in cell phones with camera capabilities.

Multilingual assistance is available in every office. Hours of operation are subject to change.

Before visiting your local office click on "Services Provided" in the chart below to see what services are available. Services are limited and not all services are available at every TAC office and may vary from site to site. You can get these services on a walk-in basis.

City  Street Address  Days/Hours of Service  Telephone* 
Charleston 1 Poston Rd. 
Charleston, SC 29407

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

    Services Provided

(843) 566-0209 
Columbia  1835 Assembly St.
Columbia, SC 29201 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

    Services Provided

(803) 765-5544 
Florence  401 W. Evans St.
Florence, SC 29501 

Monday-Friday - 8:30 a.m.- 4:30 p.m. 
(Closed for lunch 12:30 p.m.-1:30 p.m.)

 

     Services Provided

(843) 664-8889 
Greenville  440 Roper Mountain Rd.
Greenville, SC 29615 

Monday-Friday - 8:30 a.m.- 4:30 p.m.

 

**This office will be open until 6:00 p.m. on 4/14 & 4/15**

 

    Services Provided

(864) 286-7095 
Myrtle Beach  601 19th Ave. N.
Myrtle Beach, SC 29577 

Monday-Friday - 8:30 a.m.- 4:30 p.m.
(Closed for lunch 12:00 noon-1:00 p.m.)

 

     Services Provided

(843) 626-2700 

* Note: The phone numbers listed in the chart above are not toll-free for all locations. When you call, you will reach a recorded business message with information about office hours, locations and services provided in that office. If face-to-face assistance is not a priority for you, you may also get help with IRS letters or resolve tax account issues by phone, toll free at 1-800-829-1040 (individuals) or 1-800-829-4933 (businesses). 

For information on where to file your tax return please see Where to File Addresses

The Taxpayer Advocate Service: Call (803)253-3029 in Columbia or 1-877-777-4778 elsewhere, or see Publication 1546, The Taxpayer Advocate Service of the IRS. For further information, see  Tax Topic 104.

Partnerships

IRS and organizations all over the country are partnering to assist taxpayers. Through these partnerships, organizations are also achieving their own goals. These mutually beneficial partnerships are strengthening outreach efforts and bringing education and assistance to millions.

For more information about these programs for individuals and families, contact the Stakeholder Partnerships, Education and Communication Office at:

Internal Revenue Service
1835 Assembly St. MDP 16
Columbia, SC 29201

For more information about these programs for businesses, your local Stakeholder Liaison office establishes relationships with organizations representing small business and self-employed taxpayers. They provide information about the policies, practices and procedures the IRS uses to ensure compliance with the tax laws. To establish a relationship with us, use this list to find a contact in your state:

Stakeholder Liaison (SL) Phone Numbers for Organizations Representing Small Businesses and Self-employed Taxpayers.

Page Last Reviewed or Updated: 28-Mar-2014

The Where To Find State Tax Forms

Where to find state tax forms Publication 946 - Additional Material Table of Contents Appendix B — Table of Class Lives and Recovery PeriodsHow To Use the Tables This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Appendix A Please click here for the text description of the image. Where to find state tax forms Table A-1 and A-2 Please click here for the text description of the image. Where to find state tax forms Table A-3 and A-4 Please click here for the text description of the image. Where to find state tax forms Table A-5 and A-6 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-7 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-8 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-8 (continued) This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-9 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-9 (continued) This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-10 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A–10 (continued) This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-11 Please click here for the text description of the image. Where to find state tax forms Table A-11 (continued) This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-12 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-12 (continued) This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-13, A-14 and A-14 (continued. Where to find state tax forms 1) Please click here for the text description of the image. Where to find state tax forms Table A-14 (continued. Where to find state tax forms 2) Please click here for the text description of the image. Where to find state tax forms Table A-15 Please click here for the text description of the image. Where to find state tax forms Table A-15 (continued) Please click here for the text description of the image. Where to find state tax forms Table A-16 Please click here for the text description of the image. Where to find state tax forms Table A-16 (continued) This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-17 Please click here for the text description of the image. Where to find state tax forms Table A-17 (continued) Please click here for the text description of the image. Where to find state tax forms Table A-18 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-18 (continued) This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table A-19 and Table A-20 Please click here for the text description of the image. Where to find state tax forms Quality Indian Reservation Property Tables Please click here for the text description of the image. Where to find state tax forms Qualified Indian Reservation Property Tables 2 Appendix B — Table of Class Lives and Recovery Periods The Table of Class Lives and Recovery Periods has two sections. Where to find state tax forms The first section, Specific Depreciable Assets Used In All Business Activities, Except As Noted, generally lists assets used in all business activities. Where to find state tax forms It is shown as Table B-1. Where to find state tax forms The second section, Depreciable Assets Used In The Following Activities, describes assets used only in certain activities. Where to find state tax forms It is shown as Table B-2. Where to find state tax forms How To Use the Tables You will need to look at both Table B-1 and B-2 to find the correct recovery period. Where to find state tax forms Generally, if the property is listed in Table B-1 you use the recovery period shown in that table. Where to find state tax forms However, if the property is specifically listed in Table B-2 under the type of activity in which it is used, you use the recovery period listed under the activity in that table. Where to find state tax forms Use the tables in the order shown below to determine the recovery period of your depreciable property. Where to find state tax forms Table B-1. Where to find state tax forms   Check Table B-1 for a description of the property. Where to find state tax forms If it is described in Table B-1, also check Table B-2 to find the activity in which the property is being used. Where to find state tax forms If the activity is described in Table B-2, read the text (if any) under the title to determine if the property is specifically included in that asset class. Where to find state tax forms If it is, use the recovery period shown in the appropriate column of Table B-2 following the description of the activity. Where to find state tax forms If the activity is not described in Table B-2 or if the activity is described but the property either is not specifically included in or is specifically excluded from that asset class, then use the recovery period shown in the appropriate column following the description of the property in Table B-1. Where to find state tax forms Tax-exempt use property subject to a lease. Where to find state tax forms   The recovery period for ADS cannot be less than 125 percent of the lease term for any property leased under a leasing arrangement to a tax-exempt organization, governmental unit, or foreign person or entity (other than a partnership). Where to find state tax forms Table B-2. Where to find state tax forms   If the property is not listed in Table B-1, check Table B-2 to find the activity in which the property is being used and use the recovery period shown in the appropriate column following the description. Where to find state tax forms Property not in either table. Where to find state tax forms   If the activity or the property is not included in either table, check the end of Table B-2 to find Certain Property for Which Recovery Periods Assigned. Where to find state tax forms This property generally has a recovery period of 7 years for GDS or 12 years for ADS. Where to find state tax forms See Which Property Class Applies Under GDS and Which Recovery Period Applies in chapter 4 for the class lives or the recovery periods for GDS and ADS for the following. Where to find state tax forms Residential rental property and nonresidential real property (also see Appendix A, Chart 2). Where to find state tax forms Qualified rent-to-own property. Where to find state tax forms A motorsport entertainment complex placed in service before January 1, 2014. Where to find state tax forms Any retail motor fuels outlet. Where to find state tax forms Any qualified leasehold improvement property placed in service before January 1, 2014. Where to find state tax forms Any qualified restaurant property placed in service before January 1, 2014. Where to find state tax forms Initial clearing and grading land improvements for gas utility property and electric utility transmission and distribution plants. Where to find state tax forms Any water utility property. Where to find state tax forms Certain electric transmission property used in the transmission at 69 or more kilovolts of electricity for sale and placed in service after April 11, 2005. Where to find state tax forms Natural gas gathering and distribution lines placed in service after April 11, 2005. Where to find state tax forms Example 1. Where to find state tax forms Richard Green is a paper manufacturer. Where to find state tax forms During the year, he made substantial improvements to the land on which his paper plant is located. Where to find state tax forms He checks Table B-1 and finds land improvements under asset class 00. Where to find state tax forms 3. Where to find state tax forms He then checks Table B-2 and finds his activity, paper manufacturing, under asset class 26. Where to find state tax forms 1, Manufacture of Pulp and Paper. Where to find state tax forms He uses the recovery period under this asset class because it specifically includes land improvements. Where to find state tax forms The land improvements have a 13-year class life and a 7-year recovery period for GDS. Where to find state tax forms If he elects to use ADS, the recovery period is 13 years. Where to find state tax forms If Richard only looked at Table B-1, he would select asset class 00. Where to find state tax forms 3, Land Improvements, and incorrectly use a recovery period of 15 years for GDS or 20 years for ADS. Where to find state tax forms Example 2. Where to find state tax forms Sam Plower produces rubber products. Where to find state tax forms During the year, he made substantial improvements to the land on which his rubber plant is located. Where to find state tax forms He checks Table B-1 and finds land improvements under asset class 00. Where to find state tax forms 3. Where to find state tax forms He then checks Table B-2 and finds his activity, producing rubber products, under asset class 30. Where to find state tax forms 1, Manufacture of Rubber Products. Where to find state tax forms Reading the headings and descriptions under asset class 30. Where to find state tax forms 1, Sam finds that it does not include land improvements. Where to find state tax forms Therefore, Sam uses the recovery period under asset class 00. Where to find state tax forms 3. Where to find state tax forms The land improvements have a 20-year class life and a 15-year recovery period for GDS. Where to find state tax forms If he elects to use ADS, the recovery period is 20 years. Where to find state tax forms Example 3. Where to find state tax forms Pam Martin owns a retail clothing store. Where to find state tax forms During the year, she purchased a desk and a cash register for use in her business. Where to find state tax forms She checks Table B-1 and finds office furniture under asset class 00. Where to find state tax forms 11. Where to find state tax forms Cash registers are not listed in any of the asset classes in Table B-1. Where to find state tax forms She then checks Table B-2 and finds her activity, retail store, under asset class 57. Where to find state tax forms 0, Distributive Trades and Services, which includes assets used in wholesale and retail trade. Where to find state tax forms This asset class does not specifically list office furniture or a cash register. Where to find state tax forms She looks back at Table B-1 and uses asset class 00. Where to find state tax forms 11 for the desk. Where to find state tax forms The desk has a 10-year class life and a 7-year recovery period for GDS. Where to find state tax forms If she elects to use ADS, the recovery period is 10 years. Where to find state tax forms For the cash register, she uses asset class 57. Where to find state tax forms 0 because cash registers are not listed in Table B-1 but it is an asset used in her retail business. Where to find state tax forms The cash register has a 9-year class life and a 5-year recovery period for GDS. Where to find state tax forms If she elects to use the ADS method, the recovery period is 9 years. Where to find state tax forms This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table B-1 Please click here for the text description of the image. Where to find state tax forms Table B-2 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table B-2 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table B-2 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table B-2 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table B-2 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table B-2 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table B-2 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table B-2 This image is too large to be displayed in the current screen. Where to find state tax forms Please click the link to view the image. Where to find state tax forms Table B-2 Tax Publications for Business Taxpayers Prev  Up  Next   Home   More Online Publications