179 Depreciation for Home Day Care Business

[SensibleandHourly]

Good afternoon, Community, 

How many more days again? 🤔

Quick question for a home day care business that purchased a pretty nice tractor (15k) to primarily clear snow during the winter for their day care. (And, yes, in my neck of the woods, we get ridiculous amounts of snow, lol).

So, I've been reading about depreciation options until I have utterly confused myself for this one!! Since the purchase was in 2022, do I simply declare it as a 179 Depreciate expense and manually apply the time/space percentage to the purchase price, or is there a better way to let the system calculate it that I am not seeing? 

Thank you for those who might have time to respond, 

Dawn 

[TaxGuyBill]

Section 179 only applies if the business percentage is over 50%.  So your client may not be able to use 179 for that.

But Bonus depreciation would apply.  Just enter the full asset cost, the business percentage, and check the box that it is "qualified property" for bonus depreciation.

[BobKamman]

It hasn't snowed here for years, so I am wondering if it only snows there on days when kids show up.  Do they take kids on weekends too?  If not, do they let it sit until Monday morning?  And then I wonder how else the tractor is used.  Do they have 30 acres and use it for landscaping projects?  Does it just sit there from May through September?  Maybe they lease it to a company in Argentina for winter use there?  

[SensibleandHourly]

Ah, I hear you, most likely used for other things as well. Perhaps 'primarily' wasn't the best description. But I will say the skies opened yesterday and 8-9 inches of heavy snow dropped from the skies like a snow globe! 😉 

[SensibleandHourly]

TaxGuyBill, 

 Just double-checking that you are referring to Form 4562? I'm just trying to determine what section for bonus depreciation? 

Thank you!! 

[TaxGuyBill · Accepted solution]

The Asset Entry Worksheet in ProSeries.

It is a little checkbox that will be pink (error) until you check yes or no.  It is called 'Economic Stimulus property' or something like that.

And yes, the final result will flow to 4562, but you don't need to do any data-entry on the 4562.

[SensibleandHourly]

Thank you!!! It took awhile to find that worksheet, not to mention a phone call because who knew that you can't search for Asset Entry Worksheet on the Form Search option. You have to finally notice a tab on the Depreciation Information Smart Worksheet, Line E on Form 2106. I think I have the information in there correctly and after all that, it didn't reduce the client's taxes owed. Sigh. 

But, I KNEW if you said Asset Entry Worksheet, that's exactly what I needed. Thank you again! 

[TaxGuyBill]

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@SensibleandHourly wrote:

, Line E on Form 2106.

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Wait, what?  Form 2106?  This is a Schedule C business, right?  It should be part of Schedule C, not Form 2106.

[rcooley25]

I think I answered this on somebody elses post but as far as how many days are left is too many.

What I did not say on my earlier answer was how i was going to celebrate the ending.

I am going to have a great big helping of boneless wings at Buffalo Wild Wings which I plan on washing down with as much fireball as I can drink.

[SensibleandHourly]

Oh my lands, I think I finally did it correctly!!!!   Asset Entry Worksheet, linked to the Schedule C!  I can see it on the Depreciation Report and on 4562. 

MERCI BEAUCOUP!!

[SensibleandHourly]

Rcooley25,

You've made me realize I need a plan! 😉