Depreciation  No requirement to use the same: Depreciation method or Useful life  For income tax and financial statement purposes  Generally, method.

Slides:



Advertisements
Similar presentations
Chapter 7 Accounting Periods and Methods and Depreciation Income Tax Fundamentals 2013 Student Slides Gerald E. Whittenburg Martha Altus-Buller Steven.
Advertisements

The American College: HS 321 Income Taxation
©The McGraw-Hill Companies, Inc. 2008McGraw-Hill/Irwin Chapter 7 Capital Gains and Other Sales of Property “If a client asks in any but an extreme case.
Chapter 8 Capital Gains and Losses 2013 Cengage Learning Income Tax Fundamentals 2013 Student Slides Gerald E. Whittenburg Martha Altus-Buller Steven Gill.
Chapter 10 Depreciation Howard Godfrey, Ph. D
Chapter 11 Tax Consequence of Property Disposal. Computation of Realized Gain or Loss  Everything of economic value received in exchange for a property.
Chapter 8 Depreciation, Cost Recovery, Amortization, and Depletion Copyright ©2007 South-Western/Thomson Learning Individual Income Taxes.
Accounting Periods & Methods & Depreciation Income Tax Fundamentals 2009 Gerald E. Whittenburg & Martha Altus-Buller Student’s Copy 2009 Cengage Learning.
Individual Income Taxes C8-1 Chapter 8 Depreciation, Cost Recovery, Amortization, and Depletion Copyright ©2009 Cengage Learning Individual Income Taxes.
1 Review of Depreciation and Section 179 Expensing Depreciation allows recovery of the capital invested in an asset over the life of the asset Section.
10-1 ©2010 Pearson Education, Inc. Publishing as Prentice Hall.
Long-Term Assets Cost of long-term assets Leasing long-term assets Depreciation Capital and revenue expenditures Impairments Disposition of long-term assets.
Chapter 8 Capital Gains and Losses 2014 Cengage Learning Income Tax Fundamentals 2014 Student Slides Gerald E. Whittenburg Martha Altus-Buller Steven Gill.
Chapter 7 Accounting Periods & Methods & Depreciation Income Tax Fundamentals 2011 Gerald E. Whittenburg & Martha Altus-Buller Student Copy 2011 Cengage.
Chapter 3 Financial Statements. Chapter 3 Outline 3.1 Accounting Principles Generally accepted accounting principles Auditors Accounting conventions Measuring.
© OnCourse Learning Chapter 27 : Investing in Real Estate.
Chapter Objectives Be able to: n Explain the difference between capital income and business income. n Apply the general rules in determining capital gains.
Chapter 10 Fundamental Income Tax Issues. Tax Basis: Its Nature and Significance  Newly acquired property’s initial tax basis is starting point in determining.
1 DepreciationDepreciation Our purpose in studying depreciation is to understand its impact on taxes so that this impact can be included in our economic.
10-1 ©2007 Prentice Hall, Inc ©2007 Prentice Hall, Inc. DEPR., COST RECOVERY, AMORTIZATION, & DEPLETION  Depreciation and cost recovery  Amortization.
© 2012 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Irwin/McGraw-Hill ©The McGraw-Hill Companies, Inc., 2000 Principles of Taxation Chapter 6 Property Acquisitions and Cost Recovery Deductions.
6 - 1 ©2005 Prentice Hall, Inc. Property Acquisitions and Cost Recovery Deductions Chapter 6.
Chapter 11 Property Dispositions Howard Godfrey, Ph. D
Assignment 8 Cost Recovery Deductions Limitations of “Passive Activity” Losses and Credits Basic Conditions for the Allowance of Cost Recovery Deductions.
Income Tax Fundamentals 2010 Gerald E. Whittenburg & Martha Altus-Buller Student Copy 2010 Cengage Learning.
#6-1 Chapter 6 McGraw-Hill/Irwin © 2005 The McGraw-Hill Companies, Inc., All Rights Reserved. Property Acquisitions and Cost Recovery Deductions Chapter.
Chapter 16 Federal Taxation and Real Estate Finance.
6 - 1 ©2004 Prentice Hall, Inc. Property Acquisitions and Cost Recovery Deductions Chapter 6.
Chapter 8 Depreciation, Cost Recovery, Amortization, and Depletion Copyright ©2005 South-Western/Thomson Learning Eugene Willis, William H. Hoffman, Jr.,
© 2010 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.
Cost Recovery Personal Property Tangible Personal (business) Property – generally, use depreciation table 7-1. Accelerated depreciation (versus straight.
Chapter 8 Depreciation, Cost Recovery, Amortization, and Depletion Copyright ©2006 South-Western/Thomson Learning Individual Income Taxes.
Chapter 10 Cost Recovery on Property: Depreciation, Depletion, and Amortization © Cengage Learning. All Rights Reserved. May not be copied, scanned,
Recapture 1 Extra Recapture Materials. Property Transactions: §1231 and Recapture Provisions.
Module 20 Capital Assets. Menu 1. Capital assets 2. Capital gains and losses 3. § Depreciation recapture.
©2013, College for Financial Planning, all rights reserved. Module 3 Income Tax Aspects of Property Acquisitions & Introduction to Property Dispositions.
Chapter 13 Property Transactions: Section 1231 and Recapture.
Chapter 2 Property Acquisition and Cost Recovery Copyright © 2013 by The McGraw-Hill Companies, Inc. All rights reserved. McGraw-Hill/Irwin.
© 2013 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
© 2012 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part, except for use as permitted in a license.
© 2010 by Cengage Learning Chapter 27/ Chapter 25 ________________ Investing in Real Estate.
©2015, College for Financial Planning, all rights reserved. Session 6 Basis and Cost Recovery Deductions CERTIFIED FINANCIAL PLANNER CERTIFICATION PROFESSIONAL.
Comprehensive Volume C8-1 Chapter 8 Depreciation, Cost Recovery, Amortization, and Depletion Copyright ©2010 Cengage Learning Comprehensive Volume.
© 2014 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter-10-1A- Property- Acquisition Howard Godfrey, Ph.D., CPA Professor of Accounting ©Howard Godfrey-2015.
© 2016 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chap-3-1B-Property Disposition Cap. Assets, etc. Howard Godfrey, Ph.D., CPA Professor of Accounting ©Howard Godfrey-2016.
© 2015 Cengage Learning. All Rights Reserved. May not be scanned, copied or duplicated, or posted to a publicly accessible website, in whole or in part.
Chapter 7 Property Acquisitions and Cost Recovery Deductions.
Chapter 7 Accounting Periods & Methods & Depreciation Income Tax Fundamentals 2008 Gerald E. Whittenburg & Martha Altus-Buller Student’s Copy.
McGraw-Hill/Irwin ©The McGraw-Hill Companies, Inc., 2002 Principles of Taxation Chapter 6 Property Acquisitions and Cost Recovery Deductions.
©2007 Thomson South-Western, a part of The Thomson Corporation. Thomson, the Star logo, and South-Western are trademarks used herein under license. Chapter.
McGraw-Hill/Irwin Copyright (c) 2002 by the McGraw-Hill Companies Inc Principles of Taxation: Advanced Strategies Chapter 11 Chapter 11 Dispositions of.
10-1 Copyright © 2013 Pearson Education, Inc. publishing as Prentice Hall.
McGraw-Hill/Irwin Copyright (c) 2003 by the McGraw-Hill Companies Inc Principles of Taxation: Advanced Strategies Chapter 11 Dispositions of Equity Interests.
Chapter 13 Property Transactions: Section 1231 and Recapture.
Property Dispositions
Depreciation, Cost Recovery, Amortization and Depletion
Property Acquisition and Cost Recovery
Extra Recapture Materials
Chapter 7 Accounting Periods and Methods and Depreciation
Chap-11-1A-Property Disposition Cap. Assets, etc. Howard Godfrey, Ph.D., CPA Professor of Accounting ©Howard Godfrey-2015.
Depreciation, Cost Recovery, Amortization, and Depletion
Individual Income Taxes Copyright ©2010 Cengage Learning
©2010 Pearson Education, Inc. Publishing as Prentice Hall
©2009 Pearson Education, Inc. Publishing as Prentice Hall
Chapter 27/ Chapter 25 ________________ Investing in Real Estate
Income Tax Fundamentals 2017 Student Slides
Depreciation, Cost Recovery, Amortization and Depletion
Presentation transcript:

Depreciation  No requirement to use the same: Depreciation method or Useful life  For income tax and financial statement purposes  Generally, method used for income tax purposes (MACRS) provides more depreciation in initial years of asset Present value of income tax benefits

MACRS  3-year property: semis  5-year property: vehicles, computers, office equipment  7-year property: most equipment, office furniture  10-year property: specialty barns, orchard trees and vines  15-year property: land improvements (sidewalks, roads)

MACRS  20-year property: barns  27 1/2-year property: residential real estate (was 19 years under ACRS)  39-year property: non-residential real estate (was 19 years under ACRS)  Land: can not be depreciated

MACRS  Take basis of asset times appropriate percentage for that year  One-half year depreciation in first year and last year So, 5-year property is depreciated over six years If buy more than 40% of your assets for the year at the end of the year, a use mid-quarter convention  If dispose of asset, take one-half year depreciation in year of disposal

Section 179 election  Expense any amount of cost of asset up to $133,000 in year of purchase  As long as purchases < $530,000  Must be personal property used in active trade or business Real estate does not qualify Furniture in rental house does not qualify  Limited to amount of income from business Can carry over excess not used to following year  Reason for provision  Post year-end tax planning Gives taxpayer ability to determine taxable income and income taxes

Allocation of cost of an asset  Apartment building Furnishings and equipment Land improvements Building Land  Based on: Appraisal Property tax assessments

Depreciation recapture  Section 1245: personal property All gain on sale of property up to the amount of accumulated depreciation is ordinary income  Basis is reduced by accumulated depreciation Even if failed to claim depreciation So, only portion of sales price more than original basis is capital gain

Depreciation recapture  Section 1250: real estate No recapture of depreciation if depreciated under MACRS (not treated as ordinary income)  However, all gain on sale of real estate is taxed at a capital gains tax rate of 25% to the extent of accumulated depreciation

Depreciation limitations  Listed property Cars and computers used less than 50% for business Use straight-line depreciation

Feedback: Privacy Policy Feedback
Do Not Sell My Personal Information
About project: SlidePlayer Terms of Service

© 2024 SlidePlayer.com. Inc. All rights reserved.