Lightning Fast Depreciation: The New World of Depreciation under Tax Reform

Author: Greg White

CPE Credit:  4 hours for CPAs
4 hours Federal Tax Related for EAs and OTRPs
4 hours Federal Tax Law for CTEC

Apply Latest Tax Reform Developments to Depreciation Decisions to Maximize Benefit
On the heels of the Tangible Property Regs (TPRs), the Tax Cuts and Jobs Act of 2017 (TCJA) has made further changes to depreciation including bonus depreciation and Section 179 depreciation. What are the latest developments and are there ways to depreciate property faster and achieve faster tax savings? Join experienced practitioner and instructor Greg White, CPA, for this on-demand course that will offer you tips, strategies and a heightened awareness of how depreciation can be used to achieve the best tax results on real estate and property used in business. The TCJA provides new opportunities that your business or clients can put to work right away. Rapid cost recovery can be a big help in many instances. Mr. White will also make sure you know when not to use rapid cost recovery methods.

Publication Date: July 2018

Designed For
All CPAs, EAs, tax staff, and corporate finance staff charged with calculating and planning for tax accounting methods and depreciation.

Topics Covered

  • Overview
  • TCJA and Bonus Depreciation
  • Allocation of Cost: Building, Land, and Personal Property
  • Passenger Automobiles
  • 15-Year Property
  • §179
  • §179 Qualified Real Property
  • Trading Places — QIP §179 and Bonus Depreciation
  • QRP Building Placed in Service First
  • The De minimis Basics
  • De minimis Required Book Conformity
  • Improvements and the De Minimis Rules
  • Placed in Service
  • Buildings Are Different
  • Ready‐To‐Go Equipment Is Different
  • Unfinished Equipment Is Different!!
  • Equipment in a Closed Business  is Different
  • Improvements Are Different!!
  • Placed in Service
  • Summary
  • §179-The "Surgical Approach"
  • Flexibility to Change
  • Planning Freezing Deductions "Active" Business Income
  • Freeze and Thaw Initial §179 Election, Then Revoke §179
  • Thaw and Freeze Bonus first, Then Late §179 Election
  • QBID the 20% Pass‐Through Deduction
  • Roles, Fast Write Off Rules, Special Roles Played by §179, Bonus and De minimis.
  • §179 and Gain on Sale
  • §1245 and §1250 Depreciation Recapture
  • De minimis "Recapture"
  • Caution: Trap! "Phantom Income"
  • Bonus vs. §179 vs. De minimis: Who Wins? and When?
  • Slowing Depreciation Down

Learning Objectives

  • Determine the best depreciation method for real estate improvements
  • Determine which cost recovery method is best in specific client situations
  • Apply the new rules for de minimis expensing updated for affects of the Tax Cuts and Jobs Act
  • Apply the new rules for expensing real property under the TCJA
  • Review the depreciation recapture rules that apply to bonus depreciation, §179 and the de minimis rules
  • Determine when a rapid method of cost recovery shouldn't be used
  • Recognize effective years for Qualified property placed into service is not eligible for bonus depreciation based on the new TCJA provisions
  • Identify the maximum depreciation (not including bonus) for passenger automobiles assuming qualified business use in the second taxable year after 12/31/2017
  • Differentiate following types of property and related treatment under Section 179 remain unchanged under the TCJA
  • Identify the maximum Section 179 expense amount for 2018 based on the revised provisions from TCJA
  • Recognize components which would be eligible for Section 179 deduction
  • Differentiate statements with respect to de minimis rules
  • Recognize which type of property is considered placed in service when paid or incurred
  • Recognize which type of property is considered placed in service when work is completed
  • Describe the surgical approach to tax planning
  • Identify how freezing deductions and active business income, the active business income limit applies
  • Identify a characteristic of the freeze and thaw method
  • Differentiate between bonus, Section 179, and de minimis
  • Recognize which items are eligible for bonus depreciation in various situations
  • Identify which allocation methods/approaches uses little to no documentation and is based on a preparer's experience
  • Recognize bonus and Section 280(F) interaction
  • Identify which type of properties eligibility for Section 179 did not change as a result of the TCJA
  • Describe the amount Section 179 expense phaseout begins starting in 2018
  • Identify the de minimis election per invoice for taxpayers with or without audited financial statements
  • Describe the type of property considered placed in service when it is in the taxpayer's possession
  • Identify the correct sequence for optimal basis reduction
  • Recognize which form instructions should be followed when applying the surgical approach and electing out of bonus depreciation
  • Differentiate which types of methods for QIP and recapture allocates the selling price based upon the adjusted basis

Level
Intermediate

Instructional Method
Self-Study

NASBA Field of Study
Taxes (4 hours)

Program Prerequisites
A basic understanding of tax depreciation methods.

Advance Preparation
None

Registration Options
Quantity
Fees
Regular Fee $99

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