2012 Deprecation Rule...Question for Tom

[frugalmama4]

2012 Deprecation Question-

With the 50% bonus rule in affect for 2012, The Half Year Convention Method would not play a part in calculating the amount to be deprecation in 2012 correct?

Example: Taken from your book…
Couch $1000 x 40% (T/S) =$400.00 x 50% (bonus rule) = $200.00 (to be deducted all at once). Then the remaining $200.00 x 14.29% (using 200% declining bal) =$28.58, or would I still have to apply the Half Year Convention Method to the $28.58…($28.50 x 50%) = 14.29 (amount to be depreciated for 2012) for a total of $214.29?

I think I'm starting to understand the whole deprecation thing.

Thanks Tom, and the webinar was great...answered a lot of my questions. Thanks!

[TomCopeland]

Half year convention

The depreciation percentage in the example already takes into account the half year convention. So, the additional deduction is $28.58.

It's rare that someone brings up the half year convention when talking about depreciation!

[frugalmama4]

One more question Tom

Good Morning,

I called you yesterday and forgot to ask this.

I'm switching to the actual vehicle expenses method for 2012 "claimed standard in the first year 2011"

Question-

Do I need to re-capture any previous deprecation given under the standard mileage rate? Or will deprecation just start new for the "actual vehicle expense method?

Thanks Tom!

[TomCopeland]

Car expenses

Good Morning,

I called you yesterday and forgot to ask this.

I'm switching to the actual vehicle expenses method for 2012 "claimed standard in the first year 2011"

Question-

Do I need to re-capture any previous deprecation given under the standard mileage rate? Or will deprecation just start new for the "actual vehicle expense method?

Thanks Tom!

No, you don't need to recapture any previous depreciation. The standard mileage rate includes an amount representing depreciation. Therefore, you were claiming some depreciation each year when using the standard mileage rate, but not enough to cause any recapture.