Depreciation, Section 179, and Bonus Depreciation
Learn the decision pattern the exam can test, then apply it to a realistic taxpayer fact pattern.
What changes the answer?
Purchase date and placed-in-service date are not necessarily the same, and expensing elections have different limits and consequences.
A tax-practice scenario
A business buys equipment late in the year but installation finishes later. Decide when recovery begins and compare available methods.
Identify the taxpayer, entity, transaction, and tax period first. Write the controlling tests in order, apply only the relevant facts, and keep the reporting result separate from any planning recommendation.
Do not take this shortcut.
Selecting the largest first-year deduction without testing business-use or income limitations.
Turn the rule into recall.
Create a fixed-asset record before computing recovery: ownership, use, basis, class, service date, method, and elections.
- ExplainState the governing distinction without notes.
- ApplyChange one fact in the scenario and predict the new result.
- RetrieveAnswer an unseen question, then review every option.
Official source and scope
This lesson follows the current PSI content outline and uses the IRS reference below for the underlying tax or practice framework. Always confirm current forms, instructions, thresholds, and effective dates before advising a taxpayer.