Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
26th Edition
ISBN: 9781337702621
Author: Kevin E. Murphy, Mark Higgins
Publisher: Cengage Learning
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Chapter 10, Problem 9DQ
To determine
Explain the circumstances in which the taxpayers would not want to use the accelerated depreciation, and explain the manner in which the taxpayers depreciate the assets under MACRS.
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Why is the cost of certain kinds of property not recoverable at all by way of depreciation, depletion, or amortization deductions? In addition to answering that question, give three examples of the kinds of assets that are not subject to “cost recovery”.
Given the frequently changing nature of depreciation and tax law,what must we use?
Depreciation, depletion, and amortization deductions are not available for some types of property; thus, the cost of the property is not recoverable at all. Please also include three examples of the types of assets that are not subject to "cost recovery" as part of your response to this question.
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Concepts in Federal Taxation 2019 (with Intuit ProConnect Tax Online 2017 and RIA Checkpoint 1 term (6 months) Printed Access Card)
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Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- What are the maximum postponed gain or loss and the basis for the replacement property for the following involuntary conversions?arrow_forwardAre litigation costs to defend an intangible asset capitalized or expensed? Explain your answer.arrow_forwardIn practice, would you expect the depreciation expense for a non-current asset to be overestimated or underestimated? Explain why this is the case.arrow_forward
- Depreciation is a process of asset valuation where an asset's book value (cost less accumulated depreciation) often approximates it fair value. Do you agree or disagree? Explain why or why not.arrow_forwardUnder IFRS, the costs of relocating property, plant, and equipment can be capitalized as assets and depreciated over the period of expected benefit. True Falsearrow_forwardWhy would refinancing be an alternative to sale of the property?arrow_forward
- Which of the following statements about depreciation is not true? A. Depreciation does not mirror the actual loss of value over time. B. Depreciation is the allocation of the asset’s cost to expense over the expected years of use. C. If the fair value of the asset increases, depreciation is reversed to reflect the change in value. D. U.S. GAAP requires depreciation methods to be systematic and rational.arrow_forwardThe purpose of Sec. 1245 is to eliminate the advantage taxpayers would have if they were able to reduce ordinary income by depreciation deductions and also receive favorable Sec. 1231 treatment when the asset was sold. True Falsearrow_forwardWhat are the benefits of the book depreciation? When is it used?arrow_forward
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