Question

In part II on schedule C what goes on LIne 13 Depreciation and section 179 expense deduction?

Answer 1

Line 13 in part II of schedule C is used to claim annual deduction for depreciation on business property having useful life substantially beyond the tax year. Depreciation refers to reduction in value of an asset over time, due in particular to wear and tear.

1. Line 13 is also used to report depreciation on improvements made to leased business property.

2. Depreciation on stock in trade, inventories are excluded since these are not substantially used more than a tax year.

3. Depreciation starts from the date property is first used in business and date upto which property is taken out of service.

4. Also one can elect under section 179 to expense part or all of cost of certain property bought in the current tax year for use in business