Section 179 deduction for heavy trucks - field entry interplay questions

[LSTAX]

I have a large new truck (over 6,000 lbs)  placed in service this year.  As long as I choose MACRS 5 year % Vehicles over 6000 lbs, No Limits from the "Method" drop down on screen 22 I get the full cost of the truck on form 4562 Part IV  (Summary)line 21 Listed property.  I have to enter the cost under Current Section 179 expense in order to have the cost show under Part I line 2.  Either way I get the write off in year one.  What is the technical difference/interplay between the screen fields?  

Also, unless I enter the amount under Current Section 179 expense the California 1=not eligible for state Section 179 {CA only} does not apply. 

Thank you

[PhoebeRoberts]

One is 100% bonus depreciation; the other is Sec 179. You can look at the Depreciation Schedule under Forms (you'll want the Regular, not the short version) for more detail.

[LSTAX]

Thanks, that makes sense.  Do you know off-hand if both methods would be subject to depreciation recapture at sale down the road?   Also are they both all or nothing - 100%, or can you choose to depreciate more than regular depreciation but not the entire cost in one year?  Say 75% this year and put the other 25% on regular MACRS?

[PhoebeRoberts · Accepted solution]

Both bonus and 179 are depreciation for calculating the ordinary gain on disposition, but if they're in an entity, the K-1 presentation is different. 

You can elect 179 dollar by dollar, but bonus is all or nothing by depreciable life (all your 5-year property). 

The bonus depreciation rules and planning techniques changed this last year, so worth getting some continuing education on.

[LSTAX]

Thank you for your detailed answer!

[Busy]

I need to opt out of 179 election  is the default IN the deprecatiion I need the deprecation bonus and the the cost of the vehicle to show on the 4362.  He is in a partnership with Kaiser  How do I do this?

[TaxGuyBill]

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@Busy wrote:

 He is in a partnership with Kaiser

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Are you preparing the 1040, and the taxpayer received a K-1 from a Partnership?

If so, the Section 179 election is made at the Partnership level. You can't change that on the 1040.