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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10103
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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How do I answer question #13 on Schedule C, Part II of the

Customer Question

How do I answer question #13 on Schedule C, Part II of the 2011 1040 form. I have read the instructions but cannot find how to answer this question. Any help will be appreciated.
Submitted: 1 year ago.
Category: Tax
Customer: replied 1 year ago.
I want the depreciation and section 179 Expense Deduction in answer to question #13
Customer: replied 1 year ago.
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Expert:  Lane replied 1 year ago.

Hi,

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When you puchase property to use in the business (anything from office furniture to computers) you can't USUALLY take a full deduction for the entire cost ... you have to deduct the cost over a period of years (this is called depreciation)

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When you deduct this portion of the cost every year, as an expense, a depreciation deduction, you'll eventually get the expenses for the entire cost. Computer equipment, for example, is five years.

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There IS however a special incentive that MAY be going away at the end of 2015 (unless it's extended, called Section 179)

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The Section 179 limit has been reduced to $25,000. This deduction is good on new and used equipment, as well as off-the-shelf software. This limit is only good for 2015, and the equipment must be financed/purchased and put into service by the end of the day, 12/31/2015.

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AND you must USE that equipment at least 50% for business of there will be what's called depreciation recapture (where the deduction you took to expense it all in the first year is added back to your income later.

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This 179 deduction is also should you choose to take it for equipment purchases for the year is ALSO taken on line 13.

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Does this help?

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Let me know

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Lane

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Expert:  Lane replied 1 year ago.

By the way, you'll use form 4562 "Depreciation and Amortization," if you have any of the following (this will then flow TO line 13)

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  • you're claiming depreciation on business property you purchased and placed in service during the year
  • you're claiming depreciation on a vehicle or other "listed property"
  • you're claiming a section 179 expense

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(Certain types of property used in business are considered "listed;"

  • Cell Phones
  • Vehicles under 6000 pounds
  • COmputers and computer equipment such as printers and monitors (UNless they're used at either a regular office or used at home office that qualifieds for the home office deducion_
Expert:  Lane replied 1 year ago.

Hope this helps

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Lane

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If this HAS helped, and you don't have questions, I'd appreciate a positive rating (using the stars or smiley faces on your screen) ... that's how we're credited for the work here)

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