Questions tagged [depreciation]

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4
votes
1answer
86 views

Does Internal Revenue Code section 1031 enable perpetual depreciation to offset income?

I've recently come across Internal Revenue Code section 1031, which as I understand it allows me to postpone paying taxes on income from the sale of an investment property, so long as I purchase a ...
5
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4answers
431 views

Fix vs buy: do I really need to consider a car's “value” with depreciation?

I have been thinking about the question of how to determine whether to fix my current or buy a new car. Everything I have read (see, for instance, the answers on this question) talks about determining ...
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1answer
119 views

Depreciation question from Benjamin Graham book

I am reading The Interpretation of Financial Statements by Benjamin Graham. Ch. VI, Depreciation and Depletion contains the following wording: When property is retired its gross value is deducted ...
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1answer
75 views

Status of unused depreciation on improvements to rental property, at death of owner

How is "unused" depreciation for improvements handled, on real property at time of death? Imagine my uncle purchased residential rental property for $10,000 in 1950. In 2005 he added an enclosed ...
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2answers
62 views

Claiming depreciation on a Real estate rental

Say Joe began renting out a rental property in 2015 and he has been claiming a reasonable depreciation annually for the tax years till now. For 2018 taxes, Joe wishes to stop claiming a depreciation. ...
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0answers
19 views

California depreciation options for Rental house landscape

I can use Bonus depreciation (100% for 2018) on my federal taxes for my rental house landscape project, or depreciate it over 15 years. What are my options for California taxes, since they don't do ...
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1answer
52 views

Correctly calculating depreciation when transferring an asset? [closed]

I'm building an asset manager that will manage all fixed assets in one single web application for multiple schools. Schools can transfer assets between them; this is where I get confused on the ...
2
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1answer
133 views

What should/can I do, now that I’ve closed the single-member LLC I used for freelancing?

I freelanced full-time for 6+ years through a single-member LLC, which I closed at the end of last year after I moved to a new full-time job. I was a user experience designer/researcher and designed ...
7
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1answer
288 views

Off-the-shelf Computer Software Depreciation

For the 2018 tax year, I'm looking to take 100% bonus depreciation on software expenses for my US (California) based LLC. While the tax code states that "Off-the-shelf computer software" is eligible ...
2
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1answer
179 views

Repair vs Replace a car [duplicate]

I bought a used Honda Accord in 2010 for $17k+ tax and fees. It has 59,102 miles and is paid off. Kelly Blue Book says that it's worth $6-7k. A new car such as a 2015 Accord will cost about $16k +...
9
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2answers
317 views

Time, money and probability: Should i sell my electric bike

I bought a second hand electrical bike for a very reasonable price (600 euro) more than a year ago. Since then i changed jobs and i now commute by car and the bike just sits in the shed. If I sell it ...
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1answer
50 views

Canada - Is a business or website a depreciable property

I'm considering buying a small online business. Is it a depreciable asset, and what class of asset?
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1answer
184 views

Recording the sale of a partially depreciated asset? [closed]

I have some equipment that my small business was in the process of depreciating. It was originally purchased in 2016 (totally roughly $4,500) and was partially depreciated at the end of 2016 (roughly $...
1
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1answer
134 views

Where should Accumulated deprecation appear on my personal balance sheet?

Looking at my balance sheet that my accountant prepared, and he has listed the depreciation of my property as follows Non Current Liabilities Provisions Accum Dep'n Property ...
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3answers
304 views

How to measure a currencies valuation or devaluation in relevance to itself

Usually when currencies are devalued, the percentage change is given in relevance to USD or EUR. Is there a way to measure the currencies change in value to itself or to all the world's currencies ...
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0answers
43 views

Proper depreciation/method/duration for conversion to in-law unit, in older single family home?

IRS publication 527 covers "Basis of property changed to rental use". My question is on the proper duration for the depreciation. Imagine a home was bought for $60k in 1950, with $10k of land value. ...
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8answers
14k views

Do rental car agencies sell their cars at a time when it is risky for the purchaser?

I want to buy a used car, but found many used cars were formerly owned by rental car agencies. Many websites and articles warn against buying former rental cars, because people renting these cars ...
2
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1answer
98 views

How does depreciation affect real estate capital gains tax in Ontario?

I recently sold a rental property (condo) for a profit. I owned it for 6 years, lived for the first two, then rented it out for next 4 years. I never claimed depreciation allowance—stupid me. Am I ...
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2answers
144 views

Accounting strategy for depreciating capital expenditures (real estate) that occur in different years?

Suppose I purchase a real estate property in 2010. Suppose in 2011 I perform some capital expenditures that will need to be depreciated. Suppose further that I perform some more capital expenditures ...
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0answers
31 views

Section 179 and Closing LLC

I closed my LLC 2016 (sole, no employees), can I take section 179 tax deductions in the 2016 return? Do I need to recapture my previous section 179 deductions?
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1answer
280 views

Finance, Cash or Lease?

I'm currently leasing a vehicle and I like the way it works, especially since I got a really good deal on my current vehicle. However, it is due to go back in the next few months so I am looking at my ...
0
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2answers
115 views

Income statement- amortization and depreciation

I am teaching myself financial modelling and I am looking at income statements. I have come across tutorials that calculate EBITDA through the calculation: Gross profit - SG&A Underneath the ...
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3answers
716 views

Is it common for a new car of about $16k to be worth only $4-6k after three years?

This question made me wonder how, according to the OP of that question, a car that cost about $16,000 can be worth only $4,000–$6,000 after a mere three years. Does a new car usually depreciate ...
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1answer
132 views

Accounting method change to depreciation basis : appropriate solution? (USA)

I have personal property that was converted to a rental unit in 2015. When determining the depreciation basis for this property, I used the Fair Market Value, as suggested to me by a TaxAct ...
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0answers
49 views

What documentation might be needed to support a rental property's depreciation basis, and under what circumstances? (IL, USA)

Last year, after moving out of our residential property, we converted it to a rental. When arriving at a Fair Market Value (FMV) for determining the basis for depreciation, we relied on an estimate ...
4
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1answer
111 views

Depreciation and capital gains on a rental condo in the US

I rent out a condo that I purchased two years ago. I make a small profit. It may be advantageous for me to depreciate the condo. This presumably will increase the capital gains that will occur when it ...
5
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1answer
13k views

IRS Useful Life of a Laptop Computer

I own an IT/software company. I'm getting ready to ramp up a new venture and want to purchase some new laptops for my remote employees and myself. According to IRS publication 945, chapter 4 (https:/...
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1answer
73 views

How U.S. Depreciation works Explain in brief? [closed]

As per the my Research I came to know few terms about the U.S. Depreciation. Modified Acclerated Cost Recovery System (MARCS) Sub Divided into two terms- General Depreciation System (GDS) ...
2
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2answers
709 views

Section 179 vs depreciation of laptop

I am running my own business via LLC and was considering to buy a laptop for that business. At some point the CPA I consulted with mentioned that I should be expensing equipment purchases under $2500 ...
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4answers
4k views

How should I value personal use television for donation?

Given an LCD television using primarily for personal use, if I were to donate it what would the donation value be? I assumed that I should take straight-line depreciation over its useful life? IRS ...
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2answers
627 views

What is the risk involved in buying a used car vs new?

A depreciation chart tells us that buying a two year old vehicle will save us a heavy cost of depreciation. However, if I keep the vehicle for 10+ years this initial cost averages down a good deal. ...
0
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1answer
145 views

Can you depreciate real estate that has previously been fully depreciated?

If you buy a property that is 39 years old and has already been fully depreciated, can you depreciate it again, for another 39 years upon your purchase?
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1answer
2k views

Difference between double declining balance and reducing balance

As I understand it if we have a double declining balance asset worth £10,000, declining over 10 years, we will depreciate by an annual rate of 20%. But I have also been told that double declining is ...
2
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0answers
44 views

I've made an addition to my home: how to I reflect the adjusted basis for home office deduction purposes?

For some years I have operated a home office, and taken the home office deduction. The home office deduction (at least prior to the introduction of the simplified method) mandates calculating ...
4
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2answers
191 views

Landlord living in rental unit - tax implications?

I own a 2 family house, and after many years of renting out one half of it (and many travails with tenants), I have moved a family member into the property rent free. I have unused depreciation in ...
1
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1answer
130 views

Book keeping setup for real property depreciation

I have a rental property. I'd like to set up my books such that: the cost basis depreciable value of the house is reflected in an account, the annual depreciation is recorded sensibly, the initial ...
0
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1answer
2k views

How to calculate depreciation?

I am not accountant and my question could be trivial but I will ask it. Let's say that I bought a car that cost $50,000. The maintenance cost over 5 years is $25,000. The revenue of the car over 5 ...
3
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1answer
5k views

Tax after sale of rental property that was converted from primary

I purchased a house in 2008 which was my primary residence. In April 2013, I converted to an investment property, since I was underwater to the point where I couldn't sell it. In my 2013 and 2014 ...
1
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1answer
698 views

Strategy to offset a big one-time windfall or gain/income for tax purposes?

This is a question of curiosity, and not a situation I am in (although one day, I could hope!). I'm self-employed for a few years now, and don't make a lot in net profit, but enough to survive on in ...
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1answer
16k views

Does CAPEX include intangible assets?

CAPEX is defined here as funds used by a company to acquire or upgrade physical assets such as property, industrial buildings or equipment. The video states that "the value of the capital ...
1
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1answer
179 views

Must tangible assets be depreciated or can I take a one-time expense? [closed]

Let's say my company purchases some tangible/fixed/long-term asset. Am I required to take a prorated depreciation expense each year for the life of the asset? Do I have the option to report the ...
0
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1answer
149 views

Am I calculating depreciation correctly?

I'm confused with a number that H&R Block online is giving me with regard to depreciation. I put a dishwasher, which cost $629, in service in June 2010. On my 2010 taxes I took a 50% bonus ...
1
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1answer
310 views

How does per-annum depreciation for taxes work after the first year of depreciation?

My state requires me to report personal property that I use for my design business. Here is the specific form in question: http://www.dat.state.md.us/sdatweb/pp1inst_2015.pdf. The form says that ...
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1answer
3k views

Is laminate flooring an “Improvement” or “Depreciable Property”?

My question assumes MACRS GDS depreciation, in the United States. I converted my primary residence to a rental property last year. While I still lived there, I installed laminate flooring in some of ...
3
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2answers
2k views

Why would I choose a 40-Year depreciation instead of the standard 27.5-Year?

I converted my primary residence into a rental property last year. For depreciation purposes, I must choose between GDS ("General Depreciation System") or ADS ("Alternative Depreciation System"). ...
0
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2answers
2k views

How to determine the cost basis on primary home converted to rental (for depreciation)

I would like to know how to calculate the cost basis for a primary residence converted to a rental property. I purchased the home in Oregon for 200k in 2005. I moved out and rented it in May 2013. ...
2
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1answer
280 views

What is the cost basis of property converted to rental, purpose?

I purchased a primary residence in 2007 for $150,000 I converted in to rental property in 2014. At that time its fair market value of $40,000 What is my cost basis for depreciation? Is it based on ...
0
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1answer
164 views

Capital improvement and depreciation in restaurant LLC

I opened a restaurant and I used a sizable capital to get it up and running including upgrades to the place like plumbing, electricity, hood, etc. I bought equipment for cooking and operating the ...
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2answers
2k views

rental property depreciation and recapture on state taxes?

New to property rental researching and I have a good understanding on the high level of property depreciation, as well as the eventual recapture process (25% flat rate federal). My question is does ...
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1answer
170 views

1031 Exchange and Taxes?

We were given a property by my father in 2001 who was doing a 1031 Exchange on an investment property. Once we were given the deed and title of the property a year later, we started using it as a ...