Depreciation, Ammortization, Depletion Flashcards
Can you depreciate land?
When does depreciation start?
You cannot depreciate land, only the buildings on it.
Depreciation starts when the asset is ready for use, such as when a rental property is advertised.
What intangible property is depreciable?
Patents, copyrights, computer software.
What are ACRS and MACRS?
When were they put into use?
They are accelerated cost recovery systems, put into use in 1981 and 1987. They can’t be used on assets before then.
What is 3-year property?
Tractors, and rent-to-own property.
What is five-year property?
Autos, computers, office equipment
What is seven-year property?
Office furniture and fixtures.
What is 27.5 year property?
rental housing
What is 39 year property?
An office building
What property uses the mid month convention?
Non-residential real property and residential rental property.
What is Section 179?
What is the upper limit on 179 expenses?
How do you calculate 179 expenses?
179 allows you to deduct the cost of an asset as an expense the year it was put into service, rather than depreciate it over time. It doesn’t apply to realty or income producing property.
179 reduces basis. Any value not claimed 179 can be depreciated.
179 is the lesser of
- cost of property
- taxable income
- cap of $1,050,000
What is TCJA Bonus Depreciation?
100% first year deduction for equipment acquired and placed into service between 9/27/17 and 1/1/2023.
