Continuing with the segment on Bonus Depreciation, this post will address depreciation rules for property in the New York Liberty Zone. A little over eight years ago, the atrocious events of September 11 left our country devastated physically, emotionally, and economically. With regards to the economic turmoil that ensued, particularly in the area of the [...]
Bonus Depreciation has become a hot topic and has seen many changes over the last decade. There are also continuing debates as to how effective it really is. However, we will attempt to clarify the issues of bonus depreciation by covering all the aspects and history. Continuing from the initial post on Bonus Depreciation and [...]
Determining the correct monthly depreciation amounts for an asset requires the correct usage of recovery periods. Under MARCS, assets are assigned to a property class such as 3 year, 5 year, 7 year, nonresidential real property, etc. Associated with each property class is a recovery period in 12 month intervals (years).
The first actual recovery period [...]
When a piece of property is placed in service, you are required to use a particular convention to determine the depreciation deduction you will get for the year of acquisition. Below are the most commonly used convention types:
Half-Year (HALFYR): During the year an asset is acquired, only six months of depreciation is allowed regardless of [...]
There are two basic different methods of depreciation to choose from when depreciating an asset. These methods include Straight-line, and Declining Balance at either 200% or 150%. Choosing among these methods depends on how a company wishes to receive depreciation expenses.
The Straight-Line method is generally the most commonly used method due to its simplicity [...]
This is the first question many people have when dealing with fixed assets. What property am I allowed to depreciate?
Well, depreciation is basically a deduction for capital expenditure. It is considered a reasonable allowance for the wear and tear of assets used in a trade or business or for the production of income.
Property is eligible [...]