Depreciation Flashcards
depreciation is a economic loss..
overtime. 1011
deudction is depedent upon
bases in the property
is land depreiable?
167- NOt hard land.
What property isnt depreciable
stock, land, inventory
why stock land, inventory not depreciable
deosnt go down in any predicable way
can depreciate property if:
subject to wear, tear, exhaustion, obslesence OR held for production in income (investment income)
depreciable prop doesnt get repair duedciton because..
depreciation takes care of it.
167 authorizes
deduction for depreciation
168 tells us how to
calculate amount of deduction
7 items to tick off for depredication
- Is it depreciable prop
- What is taxpayers bases for depreciation
- Recovery period
- method of dep
5 appropriate convention
6 salvage value
7 appropriate adjustment to bases
Depreciable prop if:
used for trade bus; held for investment, AND subject to wear and tear, exhaustion, obsolesence
is hard land depreciable?
no
bases for depreciation
167 c- cost (bases in property)
Recovery period:
outlined in regs:
most bus expenses recovery periods
3, 5, 7, furniture, 7, cpus, 5
property depreciaiton recovery periods
residential 27.5
commercial 39
sidewalks 15
methods of depreciaiton
straight line, double declining balance
straight line
cost/period. ALWAYS for buildings, (may go into next year) cause of conventions
double declining balance
usses tables, use year 1 initial balance as multiple throughough
if sell after completing depreciaiton
full amoint is subject to tax.
conventions
half year, mid month for buildings
conventions are important
when selling to max depreciaiton
salvage value
abandoned by congress
appropriate adjustment to bases
FROM SL OR ddb
amortize means
depreciate
