File now or wait until 100% bonus depreciation ruling?

[Angelo Cortez]

What are you folks doing? I bought a STR last year, and if I file now, I get 80% bonus depreciation. Alternatively, I can file an extension and get 100% somewhere down the line this year.

[Kory Reynolds]

Our recommendation to most of our clients is that until we have additional information, if you are going to be able to claim bonus depreciation, just extend that tax return and wait for it to be finalized.  Especially in Partnership land - the complexities of amending a partnership return are not cheap, and if you have 20 partners that now need to all amend their returns to get their 100% bonus depreciation later, that is a lot of compliance fees just for not wanting to extend.

If you just file as is with the 80% rules, you can always amend later if/when it gets bumped to 100%, so that isn't a significant problem, just an extra step.

What I would not recommend doing is filing as 80%, and then not bothering to fix it if it goes to 100%.  When you sell that property depreciation recapture is technically measured on "allowed or allowable" depreciation on the property - meaning there is a possibility if someone claims the 80% and doesn't fix it, they'll still be paying recapture on the 100%, even if they didn't get the tax benefit of it.