Section 179 write off

[DANCINGCPA]

On S-Corp return with qualified improvements (J5). The program is NOT taking the 179 deduction.

[JeffRogers · Accepted solution]

You can claim 179 on qualified real property in 2018, see Rev Proc 2019-08 for how to do this!

[TaxGuyBill]

You are right, Rick and I were mistakenly referring to Bonus Depreciation (which is still not allowed until Congress corrects it) but it still qualifies for Section 179.

[rbynaker]

Thanks Jeff.  I like that the IRS found their own way through the muck on this one.  I somehow didn't get an email update when they released RP-2019-08.

[rbynaker]

Qualified improvements are currently in limbo pending a technical correction by Congress.  Here's an article on it:

https://www.kbkg.com/news/kbkg-tax-insight-tax-reform-changes-to-qualified-improvement-property

[TaxGuyBill]

In other words, current law says it does not qualify for Section 179.

If and when Congress makes the technical correction, then it qualifies.

I'm not sure if the S-corporation is the same, but in the Individual returns in ProSeries, the Information Worksheet (where you enter the taxpayer's name, address, etc.) it has a check box to use the 15-year Recovery Period for Qualified Improvements (which should then allow Section 179).  However, I would not recommend filing that way until the law is changed to reflect that.

[JeffRogers]

There is now a box to check in the Lacerte depreciation input screen to identify the "Qualified Real Property." I am not sure which update added this box, but it's now there! Problem Solved!

[rbynaker]

Unless you're like everyone else on this thread and using ProSeries. 🙂

[JeffRogers]

Well I am sure they will add this feature soon, so hold off on filing.