Oregon Depreciation Schedule - 2001 (Page 3 of 4) in pdf

Building Truck

The regular federal investment credit was repealed for

property placed in service after 1985. The credit is still

Cost (federal unadjusted basis) ....... $50,000 $12,000

available for limited types of property and expenditures.

Fair Market Value (as of 1/1/01) ..... $95,000

$8,000

If you have taken this credit, you will have a higher ba-

The Oregon basis of the building is $50,000. Oregon did

sis for Oregon because your Oregon basis isn’t reduced

not adopt ACRS for assets first placed in service before

by the federal credit. The difference in depreciation for

January 1, 1985, so Jeff used an allowable method using

Oregon will be shown as an “Other subtraction.”

federal laws in effect as of December 31, 1980. Jeff elected

to depreciate the building using the straight-line method

Assets placed in service on or after

over a useful life of 18 years for Oregon purposes.

January 1, 1985, and before January 1, 1987

The Oregon basis of the truck is $8,000. Oregon adopted

ACRS can be used for recovery property placed in

MACRS for assets first placed in service after December

service in tax years beginning on or between January 1,

31, 1986, so Jeff used MACRS for Oregon and began de-

1985, and December 31, 1986. Your Oregon depreciation

preciating for the remainder of its original recovery pe-

for Section 179 election to expense the cost of assets will

riod (2 years, 5 months).

generally be the same as the federal amount. Assets used

The basis of an asset subject to apportionment rules

for the production of income but not used in a trade

when brought into Oregon is figured as if it had always

or business don’t qualify for the Section 179 expense.

been subject to Oregon tax. The original unadjusted ba-

The maximum Section 179 expense is $5,000 for all

sis is reduced by depreciation allowable in previous

property.

years, using a method acceptable to Oregon for the year

the asset is placed in service. This adjusted basis is de-

Assets placed in service on or after

preciated over the remaining useful life using the same

January 1, 1981, and before January 1, 1985

allowable method.

If you claimed the one-time depreciation adjustment on

Example. A California partnership started operation by

your 1996 Oregon return, you will no longer have Or-

purchasing a Los Angeles building on January 1, 1984

egon modifications for depreciation differences for these

for $100,000. For federal purposes, the partnership de-

assets. You generally will use the same method and re-

preciated the building under ACRS as 15-year property.

covery period for Oregon that you use for federal pur-

The partnership began doing business in Oregon on July

poses. If you did not elect the one-time depreciation

1, 1986. Oregon did not allow ACRS in 1984, so the part-

adjustment on your 1996 Oregon return, you may use

nership elected to depreciate the building using the

any method allowed under 1980 federal tax law.

straight-line method over a 20-year life. Since the part-

nership is subject to the apportionment rules, the basis

Passive activity losses. You may have had a deprecia-

of the building for Oregon is as if the building was de-

tion difference for assets used in a passive activity that

preciated for Oregon using the straight-line method

were not affected by the 1996 one-time adjustment. For

from the date of purchase.

example, assets transferred into Oregon or assets

for which you claimed a federal tax credit may continue

Cost ................................................................... $100,000

to have a difference in depreciation. Report your passive

1984 straight-line depreciation ......... (5,000)

activity loss for Oregon using an “Other addition” or

1985 straight-line depreciation ......... (5,000)

“Other subtraction” on your Oregon return. Label

1986 depreciation through June 30 ... (2,500) (12,500)

it “Passive activity loss,” or “PAL.” (Refer to federal

Form 8582 and instructions for the definition of passive

Oregon basis as of July 1 ............................. $ 87,500

activity.)

For Oregon purposes, the building is depreciated using

an Oregon basis of $87,500 and the straight-line method

Suspended losses. If you elected to align your Oregon

over the remaining life.

basis with your federal basis, your 1996 one-time adjust-

ment increased (or decreased) your Oregon suspended

Did you first place assets in service outside Oregon be-

loss carryover by that amount. A one-time depreciation

fore January 1, 1981? If so, your Oregon basis will be the

adjustment should not have been claimed.

same as your federal basis.

Asset Depreciation Range (ADR)

Assets placed in service on or after

January 1, 1987

The election to use ADR for Oregon applies only to as-

sets placed in service in tax years beginning on or after

MACRS is effective for assets placed in service on or after

October 4, 1977, and before January 1, 1985. Corpora-

January 1, 1987. The method and life will be the same as

tions still using ADR depreciation for assets placed in

you used on the federal return. If you elect to expense the

service in tax years beginning before October 4, 1977 for

cost of qualifying assets under IRC Section 179, the

election and amount is also effective for Oregon purposes.

federal purposes, have an Oregon adjustment.

Oregon Depreciation Schedule - 2001 Page 3

Related Articles

Related forms

Related Categories