Depreciation
The most frequently asked tax questions related to Depreciation
Depreciation - Land depreciation
Asked Monday, November 27, 2000 by an anonymous userCPA Answer:
Land is not depreciable.
Depreciation - trees & bushes
Asked Monday, November 27, 2000 by an anonymous userCPA Answer:
Trees and bushes planted on your business property can be depreciated over a 15 year period. Landscapping service expenses can be deducted in the year performed.
Inventory
Asked Monday, November 27, 2000 by an anonymous userCPA Answer:
Property includable in inventory is not depreciable. Beginning and ending and purchased inventory costs are used in your cost of goods sold calculation to determine your gross profit.
Depreciation - Farmland
Asked Monday, November 27, 2000 by an anonymous userCPA Answer:
Farmland is not depreciable. Farm Buildings and machinery used on the farm are depreciable.
Depreciation - 15 year property
Asked Wednesday, November 08, 2000 by an anonymous userCPA Answer:
15 year property includes any municipal wastewater treatment plant, any telephone distribution plant and comparable equipment used for 2-way exchange of voice and data communication, any qualified restaurant property that is a building, any qualified leasehold improvement property, any section 1250 property that is a retail motor fuels outlet whether or not food or other convenience items are sold there, initial clearing and grading land improvements for gas utility property, certain electric transmission property.
Depreciation - Nonresidential real estate - 39 year property
Asked Wednesday, November 08, 2000 by an anonymous userCPA Answer:
Nonresidential real property is real property that is not residential real property or property with a class life of less than 27.5 years.
For nonresidential real property placed in service after 1986 and before 5/13/93 the cost is to be recovered over 31.5 years not 39.
For nonresidential real property placed in service after 1986 and before 5/13/93 the cost is to be recovered over 31.5 years not 39.
MACRS - definition
Asked Wednesday, October 18, 2000 by an anonymous userCPA Answer:
MACRS is the abbreviation for Modified Accelerated Cost Recovery System. It is a statutory method of depreciation allowing accelerated rates for most types of property used in a business or income producing activities.
Depreciation - Alternative Depreciation System (ADS)
Asked Wednesday, October 04, 2000 by an anonymous userCPA Answer:
No. You may elect to use an Alternative Depreciation System (ADS) which applies straight-line depreciation over the applicable ADS recovery period. This is in contrast to the MACRS double-declining method which would generally yield a higher deduction in the earlier years.
Depreciation - 7 year property
Asked Tuesday, October 03, 2000 by an anonymous userCPA Answer:
MACRS 7 year property includes office furniture and fixtures such as desks, files, safes, cellular phones, fax machines and any property that does not have a class life and not classified by the IRS.