Answers · Partnerships · Form 1065
Bonus Depreciation for Partnerships
Partnership vehicles/equipment are recorded at full cost with financing separate; depreciation is computed at partnership level.
This question is answered in full on the main page for it.
How it works
The rule, and what it turns on.
Section 179 is separately stated; bonus/MACRS generally affect activity income subject to special rules.
Example
$120,000 truck with $20,000 down and $100,000 loan remains a $120,000 asset.
Common mistakes
What we see go wrong, and what we do instead.
- Expensing principal.
- Using down payment as asset cost.
A better approach
- Maintain entity-level fixed asset and debt schedules.
Authority
Where this comes from, so you can check it.
IRC §§167, 168 and 179; Treas. Reg. §1.167(a)-1; IRS Publication 946; Form 4562 and instructions.
Educational information, not individualized tax advice. Treatment depends on your facts, entity classification and tax year, and IRS instructions change. Confirm your own position with us before relying on it. Mint Associates does not provide legal services.
Have this question about your own books?
Thirty minutes with someone who does this every day, and you will know where you stand. No obligation.