Bob <bobhasanaccount[at]yahoo.com> wrote:

- quote -

Looks like your calculations are off for every year starting
from 1999. I get:

1999: 378 (200% DB, 5-year, half-year is 20%)
2000: 605 (second year is 40% or 80%, or 32% of original)
2001: 363 (third year is 40% of 48%, or 19.2% of original)
2002: 218 (fourth year is 40% of 28.8%, or 11.52% of original)
2003: 218 (fifth year switches to straight-line)
2004: 108 (sixth year takes the remaining depreciation)

The switch to straight-line is maybe the trickiest part of
the calculation. If you use the IRS tables (a good idea, if
you're doing this on your own), it's built in. If you
aren't, you make the switch when the product of 100% times
the years remaining (note that it includes a fractional
year) exceeds the declining-balance percentage. In the fifth
year of 5-year/half-year, you have 1.5 years remaining, so
the straight-line percentage is 66-2/3%. This exceeds the
40% of DDB, so that's when you switch.

It looks like you used Excel to give you the DDB for two
half-years instead of one in 1999. Excel's DDB and VDB
functions are half-a**ed implementations that you really
need to avoid using for taxes, anyway. They don't handle
half-year or mid-quarter correctly.

The pros will be able to explain how you should get out of
this situation: whether and how far back you'll need to file
amended returns, or the like.

--
Chris Green

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"Bob" <bobhasanaccount[at]yahoo.com> wrote:

- quote -

Try Pub 946 pages 40 and 41

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"Bob" <bobhasanaccount[at]yahoo.com> wrote:

- quote -

Under MACRS, it is assumed you get 1/2 year in first and
last year, therefore it takes 6 years to fully depreciate.
Use the following percentages:

1-20
2-32
3-19.2
4-11.52
5-11.52
6-5.76

Mike Lewis, CPA

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200% Declining Balance for 5 year property using half-year convention
will give amounts different from what you have been using:

1. 1800 * .2 = $ 360
2. 1800 * .32 = 576
3. 1800 * .192 = 345.6
4. 1800 * .1152 = 207.36
5. 1800 * .1152 = 207.36
6. 1800 * .0576 = 103.68

These numbers assume that you did not dispose of the property before
it was fully depreciated.

Check your 1999 return's Form 4562 for the basis used, the cPa might
have used a different number than you gave.

Check out your local EA for better advice than most cPas for less
money.

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- quote -

The figure is a major part of your tax return and as such, I would not even
think of doing that calculation for you, it is considered tax prep and we don't
do that here.
Helen, EA in PA
50 miles, 3 days, 1 cause - Multiple Sclerosis Challenge Walk for the Cure
October 1 to October 3, 2004
Donate on-line at www.msandyou.org

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Bob wrote:

- quote -

You did something wrong in previous years. If you can't use
IRS Publication 946 Table A-1 column 5, you can
refer to my essay at http://www.epinions.com/content_2978128004 .

(Note to all -- I DO indirectly receive income from people
reading that essay. However, I did refer to the publication,
and I worked out the specific numbers for 5 year MY DDB in
that essay, in addition to giving the general principles
of accelerated depreciation, so it seems fair.)

--
This account is subject to a persistent MS Blaster and SWEN attack.
I think I've got the problem resolved, but, if you E-mail me
and it bounces, a second try might work.
However, please reply in newsgroup.

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I need a little help with a MACRS depreciation calculation.
It's been years since I did anything of the sort :-) My CPA
is out of town for a few days and I have to finish up the
preliminary calculations ASAP. I tried doing this in Excel
with DDB (which I thought was the same) but I seem to be
wrong about that as it gave me different numbers starting in
the first year.

Purchase date 4/2/99. No sec. 179 amount taken. No
limitations on depreciation and no excessive purchases in
last qtr, etc.

Cost: $1890. 5 year life (Computer Hardware)
Depreciation by year
1999: 651
2000: 496
2001: 297
2002: 178
2003: ????

I need the 2003 amount and I need to be able to do
(understand) the calculation for future use.

Thanks,

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