How can I enter a tax item for a section 179 election?

jimboa607

Under tax items, there is no option to identify expenses as section 179 election

Frankx

Hi @jimboa607

As you and I know (but apparently not everyone here), Sec 179 property is NOT depreciated for tax purposes.  Instead, it is immediately expensed.

Unfortunately, the Quicken application does not always give users a way to properly classify a lot of transactions so that they will merge easily with tax software.  And this is one of those instances.  So, from a tax perspective, while a fair amount of data can be exported to applications like TurboTax, Sec 179 is not one of them.  From a tax perspective, you should simply classify the cost of the property (when you purchase it) as an expense in Quicken.  I would suggest that you consider setting up a separate category (within the "Business Exp" heading in Quicken) that is titled "Equipment Expense (Sec 179)".  This way you can easily find the information at tax time.  This may understate your depreciable assets somewhat (for book purposes) but is not likely to be material should you use Quicken for financial statement purposes (due to the limitations on 179 deduction).  

Let me know if you have any followups.

Frankx

NotACPA

And, there's no way for you to add new tax lines.  You'll just need to remember that whatever category you choose to use if for this expense. 

I'd suggest creating a new category with a name that helps you to remember.

Giovanna

> @jimboa607 said:
> Under tax items, there is no option to identify expenses as section 179 election

how do you enter transaction for items that will need to be depreciated for a rental property?

Giovanna

I have Quicken Premier since before existed Quicken Home & Business and I have rental propriety and I am looking for somebody with my same situation. My question is: how have you entered and categorized the items that you depreciate? What kind of account have you created to keep track of the depreciation taken every year for a rental property?

Frankx

Hi @jimboa607

As you and I know (but apparently not everyone here), Sec 179 property is NOT depreciated for tax purposes.  Instead, it is immediately expensed.

Unfortunately, the Quicken application does not always give users a way to properly classify a lot of transactions so that they will merge easily with tax software.  And this is one of those instances.  So, from a tax perspective, while a fair amount of data can be exported to applications like TurboTax, Sec 179 is not one of them.  From a tax perspective, you should simply classify the cost of the property (when you purchase it) as an expense in Quicken.  I would suggest that you consider setting up a separate category (within the "Business Exp" heading in Quicken) that is titled "Equipment Expense (Sec 179)".  This way you can easily find the information at tax time.  This may understate your depreciable assets somewhat (for book purposes) but is not likely to be material should you use Quicken for financial statement purposes (due to the limitations on 179 deduction).  

Let me know if you have any followups.

Frankx

jimboa607

Thank you so much. I suspected that that was the only work around, but hoped there was something better that I might have been missing.

jimboa607

Giovanna, I created a separate account for the property and use that to calculate depreciation independently. As I enter expenses into Quicken, I want to be able to immediately categorize them as an expense or depreciable.

Giovanna

jimboa607, you said you have created a separate account for the property. What kind of account have you created?
I have used Quicken Premier for many years and when comes to property I had to figure out how to enter properties and how to create categories for these properties. I have more than one property and I have created 2 accounts for each property. One account to enter the property as an asset and the other account to enter the loan information. I also created an account and I called it Non-Cash Account in this non-cash account that I have created, I enter all the depreciation for all my propriety. For each property I have created categories just like the schedule E and one of the category is Depreciation so when I enter the depreciation in the Non-cash account I enter as an expense in the category Depreciation. The problem is even though the depreciation is an expense for tax purpose it is not really money that you spend. I love to hear in detail how you and anybody else has done.

jimboa607

I have the Home, Business, and Rental Property version - which has more features (such as creating a Schedule C) than Premier. I created a property and debt account. I am still learning the features. This is my first tax year with this business and this software - so a steep learning curve.