Auto Stepped-Up Basis

[hmosbergea]

Auto fully depreciated $35,000.

Spouse died.

Does auto get a stepped-up basis with depreciation starting over again?

If so, when disposing of auto, will old depreciation ($35,000) plus NEW depreciation be included to determine gain or loss?

[Just-Lisa-Now-]

spouse took over the business of the deceased spouse and their vehicle?

[jeffmcpa2010]

Let me qualify my answer - I am in a community property state, where both halves of any property get stepped up treatment. I don't know if separate property states are different.

yes - Step up basis 

Prior depreciation has nothing to do disposition after date of death.

[hmosbergea]

Thanks for the yes reply.

Didn't understand the part about the $35,000 depreciation when disposition.

[jeffmcpa2010 · Accepted solution]

When you get a step up basis, all prior depreciation goes away.

You just have Basis and can begin depreciation all over again, or have full FMV basis if there is immediate disposition.

It is just like you bought a different asset for FMV at the date of death, (well not quite, bonus depr. and section 179 MAY not apply to step up basis, I'd have to read up on that)

[hmosbergea]

Thank you. I didn't know prior depreciation disappears. Great.