Posted by Check Break on February 11, 2017 at 11:08:03 from (47.143.124.66):
In Reply to: Depreciation posted by Texasmark1 on February 10, 2017 at 14:50:33:
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After 29 years in the trenches, half of that doing adversarial tax work, I've forgotten the authority for lots of things that are written in stone so I should have kept my mouth shut. The Regs and case law will explain this best but you can still see this concept in Pub 946 that you cited to within "When Does Depreciation Begin and End?"
Pub 946 tells you depr begins when prop is placed in service, that it is continued while prop is idle, and that it ends when prop is retired from service, even if you haven't recovered your depreciable basis. Mark said he wanted to suspend depr in years 7 and 8 and resume again in year 9. That says he hasn't retired his prop from service at the end of year 6 so depr doesn't end because there's still recoverable basis (it's 10 year straight line prop). Pub 946 further requires depr in years 7 and 8 and tells you to continue to take depr when prop is idle. The tax code doesn't care if Mark can't use that depr in years 7 and 8. That ain't fair isn't a defense. If he can't use the depr in years 7 and 8, he loses it.
The problem with IRS publications is they often cannot be interpreted using plain english. They're helpful for many situations but Mark's is an oddity that is not addressed, even though it should be, because this situation happens more often than you'd think. Hope that helps.
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