Knowledge Base

13159: Depreciation Basis is Half the Cost of the Asset

Fed Returns Generally

The assets that were acquired during the tax year are showing a depreciation basis of 50%. Why is the depreciation basis 50% when it should be 100%?

When you enter a qualified asset placed in service in the current year, the software will calculate bonus depreciation and cause the depreciation basis to show as half the cost/basis of the asset (on the FED~DEPR, Depreciation Detail Listing, in View/Print mode).

To keep the program from automatically calculating bonus depreciation, go to Screen 10, Additional Depreciation Elections and select To elect out of bonus depreciation for ALL classes of property, mark this box at the top of the screen.

If you want to limit the bonus depreciation to specific properties based on the life of the asset, check the Elect out of bonus depreciation box (0% box in Drake17 and prior) next to the applicable property type(s) in screen 10.

Screen 10 is located under Depreciable Assets on the Income tab.

For more information on how Drake Tax treats bonus depreciation, see Related Links below.

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