Tax Guide for Depreciation of Property 2014 (Tax Bible Series 2014) Alexander Schaper

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Published: November 5th 2012

Kindle Edition

242 pages


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Tax Guide for Depreciation of Property 2014 (Tax Bible Series 2014)  by  Alexander Schaper

Tax Guide for Depreciation of Property 2014 (Tax Bible Series 2014) by Alexander Schaper
November 5th 2012 | Kindle Edition | PDF, EPUB, FB2, DjVu, audiobook, mp3, RTF | 242 pages | ISBN: | 10.45 Mb

This publication explains how you can recover the cost of business or income-producing property through deductions for depreciation (for example, the special depreciation allowance and deductions under the Modified Accelerated Cost Recovery SystemMoreThis publication explains how you can recover the cost of business or income-producing property through deductions for depreciation (for example, the special depreciation allowance and deductions under the Modified Accelerated Cost Recovery System (MACRS)).

It also explains how you can elect to take a section 179 deduction, instead of depreciation deductions, for certain property, and the additional rules for listed property. Depreciation is an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property.

It is an allowance for the wear and tear, deterioration, or obsolescence of the property.This chapter discusses the general rules for depreciating property and answers the following questions.• What property can be depreciated?• What property cannot be depreciated?• When does depreciation begin and end?• What method can you use to depreciate your property?• What is the basis of your depreciable property?• How do you treat repairs and improvements?• Do you have to file Form 4562?• How do you correct depreciation deductions?Useful Items - You may want to see:• 534 Depreciating Property Placed in Service Before 1987• 535 Business Expenses• 538 Accounting Periods and Methods• 551 Basis of AssetsForm (and Instructions)• Sch C (Form 1040) Profit or Loss From Business• Sch C-EZ (Form 1040) Net Profit From Business• 2106 Employee Business Expenses• 2106-EZ Unreimbursed Employee Business Expenses• 3115 Application for Change in Accounting Method• 4562 Depreciation and AmortizationSee chapter 6 for information about getting publications and forms.What Property Can Be Depreciated?You can depreciate most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment.

You also can depreciate certain intangible property, such as patents, copyrights, and computer software.To be depreciable, the property must meet all the following requirements.• It must be property you own.• It must be used in your business or income-producing activity.• It must have a determinable useful life.• It must be expected to last more than one year.The following discussions provide information about these requirements.Property You OwnTo claim depreciation, you usually must be the owner of the property.

You are considered as owning property even if it is subject to a debt.Example 1.You made a down payment to purchase rental property and assumed the previous owners mortgage. You own the property and you can depreciate it.Example 2.You bought a new van that you will use only for your courier business.

You will be making payments on the van over the next 5 years. You own the van and you can depreciate it.Leased property. You can depreciate leased property only if you retain the incidents of ownership in the property (explained below). This means you bear the burden of exhaustion of the capital investment in the property. Therefore, if you lease property from someone to use in your trade or business or for the production of income, you generally cannot depreciate its cost because you do not retain the incidents of ownership. You can, however, depreciate any capital improvements you make to the property.

See How Do You Treat Repairs and Improvements later in this chapter and Additions and Improvements under Which Recovery Period Applies in chapter 4.



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