GO Zone Property

Yes, I have waited until the last minute to file our taxes and I have a question.

We have a rental property that was purchased in Oct of 2004. We lived in it until May of 2012. It has been rented since June of 2012.

As I am completing our taxes via turbo tax it is asking me if it is a Go Zone property and I can't figure out if it is or not. The house is located in one of the counties listed as a Go Zone property, but I can't figure out if because it was purchased and we lived in it before 2005 (Katrina) if it is still eligible. Here is the info Turbo Tax provides me:


The Gulf Opportunity Zone (GO Zone) act of 2005 provides for a 50% depreciation allowance and an increased Section 179 expense deduction for qualified property, placed in service after August 27, 2005, for businesses located in the Hurricane Katrina Disaster Area.

GO ZONE EXTENSION PROPERTY
The Tax Relief and Health Care Act of 2006 and the Small Business Act of 2007 extended the placed-in-service deadlines for certain property used in the following highly damaged portions of the GO Zone:
* Louisiana: The parishes of Calcasieu, Cameron, Orleans, Plaquemines, St. Bernard, St. Tammany, and Washington
* Mississippi: The counties of Hancock, Harrison, Jackson, Pearl River, and Stone

Note: If property qualifies as both GO Zone property and Economic Stimulus Property, then for purposes of the Special Depreciation Allowance, the Economic Stimulus rules apply. For purposes of the Section 179 deduction, the GO Zone rules applied.

The rule above applies to any new personal property (categories 1 through 4 in Type of Property below) and any new leasehold improvements.

While these assets are still eligible for the 50% special depreciation allowance, this rule has the following impact:

* New vehicles placed in service in the GO Zone will qualify for the higher luxury auto limits under the Economic Stimulus rules.

* New personal property and new leasehold improvements placed in service in the GO Zone in 2008 will be treated as Economic Stimulus property for purposes of the election out of the special depreciation allowance.

QUALIFIED PROPERTY
Qualifying property must meet the following requirements:

* Active business use in the GO Zone
Substantially all of the use of the property must be:
(1) in the GO Zone, and
(2) in the active conduct of a trade or business by the taxpayer in the GO Zone.

* Type of property
Property must be one of the following types:
(1) Tangible property to which the general rules of MACRS apply that has an applicable recovery period of 20 years or less
(2) certain water utility property
(3) computer software (other than computer software amortized under I.R.C. Section 197)
(4) qualified leasehold improvement property
(5) nonresidential real property or residential rental property (i.e., buildings and their structural components)

* Original use
Original use of the property in the GO Zone must start with the taxpayer after August 27, 2005. This means that both new and used property may qualify if not previously used in the GO Zone.

* Purchase
The property must be acquired by "purchase." For GO Zone property, "purchase" means any acquisition of property except property acquired:
(1) from a relative of the taxpayer
(2) from another member of a controlled group of corporations
(3) with a carryover basis

* Acquisition Date
The property must be acquired after August 27, 2005. If a binding contract to acquire the property existed before August 27, 2005, the property does not qualify.

* Placed in Service Date
Generally, property must be placed in service before:
(a) January 1, 2009 for nonresidential real property and residential rental property
(b) January 1, 2008 for all other property.
This requirement is distinct from the acquisition date requirement above, since the acquisition date is not necessarily the same as the placed in service date. Property is considered placed in service when it is available and ready for use.

GO Zone Extension Property must be placed in service before:
(a) January 1, 2012 for nonresidential real property and residential rental property.
(b) April 1, 2012 for all other property. However, the property must be used in a qualified GO Zone Extension building, and must be placed in service not later than 90 days after the building (90-day rule).

The above GO Zone Extension Property deadlines apply to the 50% depreciation allowance. The placed-in-service deadline for the increased GO Zone Section 179 deduction was only extended for one year, to property placed in service before January 1, 2009. The 90-day rule does not apply to the Section 179 deduction.