Answers · S corporations
How Do S Corporations Handle Fixed Assets?
Maintain a fixed-asset schedule with cost, placed-in-service date, business use, depreciation and disposition data.
How it works
The rule, and what it turns on.
Book and tax depreciation can differ; financing does not determine cost basis.
Example
$90,000 truck with $20,000 down and $70,000 financing is still a $90,000 asset.
Common mistakes
What we see go wrong, and what we do instead.
- Expensing down payment only.
- Losing invoices/placed-in-service dates.
A better approach
- Reconcile fixed asset schedule to balance sheet annually.
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.
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