- quote -

To kind of add to Steve's comment, you would keep different
depreciation "books" on each asset. That is, you would have
a regular basis, and AMT basis, ACE, E&P, State (if electing
bonus and your state decouples from bonus, and even the
additional 179 expense), and maybe even GAAP basis.

So, to answer your question, you still reduce your cost
basis by the depreciation allowed or allowable.

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carol wrote:

- quote -

Unfortunately, depreciation isn't optional. There is a
carryover provision on the AMT that you paid, so if in the
next year you are not subject to it, you may see some
benefit from the prior year.

(BTW, this is no different than my property tax. I am unable
to deduct it, i.e. the tax creates a dollar for dollar
increase to my AMT. There's no option to carry this forward,
I can only deduct the property tax in the year paid.)

JOE

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carol <alumrock[at]hotmail.com> wrote:

- quote -

In most situations, the basis is reduced by the allowble
depreciation, whether or not you figured that depreciation
into prior year tax returns.

Steve

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"carol" <alumrock[at]hotmail.com> wrote:

- quote -

Your question doesn't make sense, because AMT doesn't
generally limit depreciation. There are other elements of
the tax code that can limit losses (passive activities,
at-risk rules) which could include depreciation. Oh, if you
are depreciating a computer for investment purposes, as a
miscellaneous itemized deduction, you could lose the benefit
of the deduction (though not the deduction for regular tax
purposes). If that were the case I would suggest choosing a
very slow depreciation method, on the off chance that the
deduction might be useful in a later year.

--
Tom Healy, CPA
Boulder, CO
Web: http://www.tomhealycpa.com

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carol wrote:

- quote -

Yes.

However, remember that under AMT, the accumulated
depreciation could be a different number - and that could
also affect the AMT credit (form 8801) when returning to the
regular tax system.

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If you could not take a depreciation deduction on your
investment property because of AMT, do you still reduce
your cost basis by that amount or you freeze your cost
basis. Any ideas?

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