Office equipment depreciation

Protocol2000 · ‎April 15, 2020

I purchased several desktop computers in 2015 that had never been depreciated, as well as some desks and other furniture. Can I do a depreciation from 2015-2019 all together? If so, what steps would I take?

Thank you.

Protocol2000 · ‎April 15, 2020

Thank you. What about if I don't do 2015-16-17-18, and just depreciate for 2019. Is that doable? or should I leave it alone? My biggest concern is that the whole purchased amount is in the Balance Sheet.

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john-pero · ‎April 16, 2020

A little research indicates that the IRS will not allow you take depreciation expense at a time when it does not occur. What this means is if you did not take depreciation in years 1 and 2 but do in 3 all you can take is the value of depreciation for year 3, typically 1/5 in a 5 year llife. If you chose not to expense depreciation in years 1 and 2 you cannot catch up in year 3 to make up for lost expense. The only silution as I I think I may have stated is to amend your returns.

If you only take years 3, 4, 5 yoru asset would have a remaining non-depreciable amount equal to what you declined (or forgot) to take in years 1 and 2

View solution in original post

john-pero · ‎April 15, 2020

If you are going to straight-line depreciate you have to do it for the entire period from when you start. Short answer no. You would start in 2020 and next tear and next, etc.

But let's look at it differently you can ammend 3 years back so you could ammend 2016,2017, 2018 since 2019 is not due until 7/15. Put them in service in 2016 and submit 3 amended returns

Or, per line item including tax of $2500 or less from I believe 2016 forward i will have to check on my desktop, you can direct expense such items under safe harbor de minimis rules and never record as fixed assets so you could fully expense but only in year of putlrchase or first use. Without looking I cannot guarantee if 2015 or even 2016 is included.

Trouble is even under safe harbor if the auditor came calling you could not prove you bought those all last year

Protocol2000 · ‎April 15, 2020

Thank you. What about if I don't do 2015-16-17-18, and just depreciate for 2019. Is that doable? or should I leave it alone? My biggest concern is that the whole purchased amount is in the Balance Sheet.

Anna S · ‎April 15, 2020

Hello, @Protocol2000.

Based on the information you provided, I suggest reaching out to your accountant to determine the best way to record your depreciation. They're more knowledgeable about your books and can tell you the best way to mark your old purchases of office equipment. Your accountant can also address your concern about the whole purchase amount showing up on the Balance Sheet.

I'm only a post away if you have any other questions or concerns. Wishing you the best now and in the future!

john-pero · ‎April 16, 2020

A little research indicates that the IRS will not allow you take depreciation expense at a time when it does not occur. What this means is if you did not take depreciation in years 1 and 2 but do in 3 all you can take is the value of depreciation for year 3, typically 1/5 in a 5 year llife. If you chose not to expense depreciation in years 1 and 2 you cannot catch up in year 3 to make up for lost expense. The only silution as I I think I may have stated is to amend your returns.

If you only take years 3, 4, 5 yoru asset would have a remaining non-depreciable amount equal to what you declined (or forgot) to take in years 1 and 2

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