Bonus depreciation for decedent

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I use lacerte and in preparing a 1040 for a decedent added a new farm equipt asset purchased just days before death. To stop depreciation on this and all farm assets I entered the date of death with no sales price for each. Lacerte is not allowing bonus depreciation for the new asset which is being questioned by the estate's personal representative. Is this correct treatment? and if not, How do I properly enter it so that bonus will be correctly applied? TIA.

Lacerte Tax

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pat11Author

Level 5

Since posting my question I have figured out that if I remove the disposition date from this asset the 40% bonus depreciation is applied. Now my questions are: is bonus allowed for the decedent since they died so soon after placing in service? And if so, at what amount do I carry the asset on the estate 1041? Or, can I just let the estate take the bonus and be done.

BobKamman

Level 15

What made you think you had to stop depreciation?

https://bradfordtaxinstitute.com/Content/Impact-of-Death-and-Retirement-on-the-179-Deduction.aspx

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pat11Author

Level 5

Ah yes, the unhelpful reply. What makes you think I didn’t? The decedent died in April. If I don’t enter a date depreciation is applied for the entire year. Besides this is bonus and Lacerte clearly provides instructions to enter the date of death without a sales price to properly calculate depreciation only for the time decedent was alive. Further, I am not a Bradford tax subscriber.

sjrcpa

Level 15

It's a short year for depreciation, and some other, purposes. Bonus depreciation is not affected by this. Regular depreciation is.

The more I know the more I don’t know.

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