One of the emerging hot topics in tax depreciation is Leasehold Improvement Depreciation. Lately, there seem to be many questions revolving around what qualifications there are for depreciating leasehold improvements and what guidelines must be followed when doing so. This probably stems from the recent rules and allowances created through the initial law (Job Creation [...]
In 1986, assets of different classes were given associated class lives. These class lives are formatted into tables that are viewable on the IRS website under Publication 946. Using these class life tables can be confusing to many. Such confusion may occur because the tables are lengthy, some assets have no class life with assigned [...]
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 [...]
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 [...]
Below is a general overview of the history of depreciation through 1986. Included are major changes or additions to rules and regulations concerning the ways in which depreciation is determined and allowed.
1934: Up to this point the estimation of the useful lives of depreciable assets was not very regulated. Then, during the Great Depression, the [...]