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Client installed solar panels for warehouse. Received $149K

government grant and $174K from...
Client installed solar panels for warehouse. Received $149K government grant and $174K from local government. They spent $250K out of pocket. My question for basis calculation do I add $250K +149K + 174K = $573K less $174K (local grant) and $74.5 (50% of grant) to come up with the basis? I believe it's eligible for 50% bonus depreciation and remainder depreciated over 5 years MACR?
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Answered in 8 minutes by:
8/20/2013
Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
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Anne :

Hi

Anne :

Thank you for using justanswer.

Anne :

First, you have calculated the basis correctly

Anne :

The panels are eligible for the 50% bonus, and they are 5 year property

Anne :

I'm assuming you already knew about Pub 946 Deprecition

Anne :

So if you were looking for confirmation that you are correct, then I can absolutely give you that

Anne :

Is there anything else I can help you with?

Anne :

If not, then I truly hope this information is helpful but please do not rate until you are satisfied. If you want to click on 1 or 2 just click on the continue to work with me button instead. You will then be able to add any other info or respond to what I have posted so far. Rating 3-5 gives me credit and a good rating but you can still converse with me.


 

Customer:

Because of the 50% grant reduction, there would be a book and tax depreciation difference (M-1) adjustment?

Anne
Anne, Master Tax Preparer
Category: Tax
Satisfied Customers: 2,439
Experience: Enrolled Agent with 25 Years Experience specializing Individual and Small Businesses
Verified
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Customer reply replied 4 years ago

 


Because of the 50% grant reduction, there would be a book and tax depreciation difference (M-1) adjustment?

Yes, there should be an adjustment on the M1 for the difference in depreciation due to the 50% bonus.

Thank you for the positive rating. Please come back to this site (you can bookmark it) if you have any other follow up questions.
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Anne
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