Depreciation

[TwoBrothersLC]

My wife is doing the taxes for us and we have some questions about depreciation. We paid $2000 for our original equipment which included 32" Exmark, 52" Scag (both w/bs), 60" Exmark Turf Ranger, aerator, pwr wshr, tongue mnt leaf vac, wheelbarrows, garden tools, various push mowers in different need of repair. How do we depreciate? Is there a magic percentage that will work?

Thanks ahead for input...

[Aproct]

It depends. I am assuming that you paid that for all the equipment? If so, the new rules for tax depreciation is that you are allowed to take upfront, 50% of the total cost of the depreciation and the remaining depreciation is determined under MACRS depreciation method over the next 7 years. Now, if you want, since you purchased all the equipment in one year, you could 179 the equipment (expense it) and take the full deduction against the income. now you will be limited to the amount of depreciation expense you can take if you have no other income. I am assuming you are preparing a Schedule C for your personal taxes. Let your wife know that she will need to prepare a Form 4562, Depreciation form to attach to your Schedule C to show to the IRS how the depreciation expense was determined.

Any other questions, just PM me.