Answers · Partnerships · Form 1065
How Is Depreciation Reported by a Partnership?
Partnership vehicles/equipment are recorded at full cost with financing separate; depreciation is computed at partnership level.
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.
Also asked
The same question, the other ways people put it.
- How Are Partnership Vehicles and Equipment Recorded?
- Bonus Depreciation for Partnerships
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