If you’re a business owner hoping to deduct asset depreciation from your gross income, it’s crucial to track the percentage of business use of assets. In one case, a married couple were long-time farmers. They deducted large amounts of depreciation on farm equipment and vehicles over several years, but they failed to track the business use of the assets. Based on inadequate records, the IRS disallowed most of the deductions. Fortunately, the U.S. Tax Court found a reasonable basis for redetermining proper depreciation, allowing higher depreciation of some assets. However, others were disallowed. Keeping good records from the start may allow you to avoid a lengthy battle. (TC Memo 2022-117) Call or visit our website for more information! www.mjscpa.com/
