Revoking the Bonus Depreciation Election

Posted by Lee Reams Sr., BSME, EA on

Ever wonder if you can revoke an election not to claim bonus depreciation? Generally, the election out of bonus depreciation can only be revoked with IRS consent, except that if made on a timely filed return, the election-out can be revoked on an amended return filed within six months of the original return's due date (excluding extensions). (Reg § 1.168(k)-1(e)(7))

Reg § 1.168(k)-1(e)(7)(ii) - Automatic 6-month extension - If a taxpayer made an election specified in paragraph (e)(1) of this section for a class of property, an automatic extension of 6 months from the due date of the taxpayer's Federal tax return (excluding extensions) for the placed-in-service year of the class of property is granted to revoke that election, provided the taxpayer timely filed the taxpayer's Federal tax return for the placed-in-service year of the class of property and, within this 6-month extension period, the taxpayer (and all taxpayers whose tax liability would be affected by the election) files an amended Federal tax return for the placed-in-service year of the class of property in a manner that is consistent with the revocation of the election.

 

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