- 21 -
Line 9.--Report property that you elect, under
section 168(f)(1), to depreciate by the units-of-
production method or any other method not based
on a term of years (other than the retirement-
replacement-betterment method).
On a separate sheet, attach: (1) a description
of the property and what depreciation method you
elect that excludes the property from ACRS; and
(2) the depreciable basis (cost or other basis,
reduced, if applicable, by salvage value, investment
credit, and the section 179 expense).
Enter the depreciation deduction in column (f).
The Form 4562 filed with Guaranteed's tax return for its
taxable year ending December 31, 1987, contains the heading on
line 9 "Property subject to section 168(f)(1) election."
However, Guaranteed left column (f) of line 9 blank. Rather, it
appears the depreciation deduction for the rental property has
been included in column (f) of line 10--"Other depreciation"
where a $40,616 deduction is claimed. Thus, Guaranteed failed to
indicate on its tax return, or on the accompanying Statement 2
and Form 4562, that the rental property (or any other of its
property) was subject to the section 168(f)(1) election.
Moreover, Guaranteed failed to indicate on its tax return, Form
4562, or Statement 2 that it was using the income forecast method
of depreciation. Rather, the Statement 2 "Method" column was
left blank.
For the tax year ending December 31, 1987, Guaranteed was
not even in substantial compliance with the election
requirements. Nothing in Guaranteed's return, or on the
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011