Wednesday, November 24, 2010

TWO COMBINES IN ONE YEAR TAX QUESTION

QUESTION: I purchased a combine earlier this year. Now I am trading for a new combine and trading in the one I purchased in February. Can I take depreciation on two combines in one year?

ANSWER: Based on the information you gave me, you will be able to take depreciation on the cash amounts that you paid on both combines during the year purchased. Remember you do need possession of the combine prior to tax year-end.