Depreciation

Forum|Forum|5 years ago
December 29, 2020
4 replies
14 views

A client bought a 60 foot trailer to put on his lot as an additional office. I would like to take Bonus Depreciation on it but not sure if I can. It is personal property as it mobile and not on a cement foundation but it is not easily moved and intent is to keep it on the property. I tend to think it will not qualify for Bonus, but I think it is gray.

ProSeries Professional

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T

TaxGuyBill

@bertrandcpa wrote:
It is personal property

If it is personal property, why do you think it would not qualify for Bonus?

B

bertrandcpaAuthor

Level 3

Thank your for your reply. The reason why I do not think it qualifies is that a mobile home used for a rental is considered residential real property (has a bathroom, sleeping facilities and kitchen) though personal property is depreciated over 27.5 years (Sec 168(c)). If follows commercial rental that is permanently used for an office and not easily moved would be 39 year property.

If it is not easily moveable, it would be section 1250 property but easily moveable 1245. If it is permanently anchored in placed it is clearly 1250, but if not anchored but has plumbing electrical hard wired into it then does that make it 1250 property or not?

T

TaxGuyBill

@bertrandcpa wrote:
If it is permanently anchored in placed it is clearly 1250, but if not anchored but has plumbing electrical hard wired into it then does that make it 1250 property or not?

In my opinion the plumbing (and maybe the electrical) anchors it, making it §1250 property, so it is no longer personal property.

If that is the case, it is depreciated over 39 years and not eligible for Bonus.

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