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PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4622
Experience:  35 years tax experience, including four years at a Big 4 firm.
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I have a tax client that is behind on s corporate income tax

Customer Question

I have a tax client that is behind on his corporate income tax returns. The last return filed was for 2010. I am trying to calculate depreciation for the 2011 tax return and the 2010 Depreciation Detail is as follows:
Description: Buildings and Other
Date: 12/1/1996
Cost: 280,886
Business Percentage: 100%
Depreciation Basis: 280,886
Life: 40 years
Method: S/L - M/M
Rate: 2.5%
Current Deprecation: 3,404
Accum Depr: 155,262
AMT: 7,022
I calculated the depreciation to be 7,022 same as the AMT depreciation for 2010 and moving forward for 2011. I'm trying to figure out how the 3,404 was calculated for 2010 and what the correct depreciation should be for 2011 and moving forward.
Submitted: 2 years ago.
Category: Tax
Expert:  PDtax replied 2 years ago.

Hi from just answer. I'm PDtax, and can assist.

Expert:  PDtax replied 2 years ago.

The AMT life of 40 years is correct, as is your AMT math.

I like to back into the depreciation in spots like this, but the regular depreciation doesn't seem right. It should be higher than the AMT.

Unless ADS was elected, 40 year straight line, my best guess is that this year was an adjustment for prior year bad math. I would have to assume this fixed prior year issues, and use the 39 year tables for the remainder of years you need to file.

Expert:  PDtax replied 2 years ago.

Thanks for asking at just answer. Positive feedback is appreciated. I'm PDtax.