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Chapter_10__Handout_Notes - Straight-line ADS – Table...

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Chapter 10 Cost Recovery Depreciation in general Section 179 Qualified taxpayers Not estates/trusts and generally not rental real estate related Qualified property Depreciable, tangible, personal (not real estate) Limits Annual limit (applies to entity and shareholder) $128,000 of Section 179 in 2008 Annual investment limit $510,000 - $638,000 phase out Income limit To the extent of income from trade/business C/O excess MACRS New and used tangible property Class life system (Table 10-3) Conventions Mid-year (Table 10-4) ½ year in 1 st and last Mid-month (Table 10-6) For real estate Mid-quarter When > 40% of depreciable basis acquired in last 3 months
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Unformatted text preview: Straight-line ADS – Table 10-7 Mandatory for alternative minimum tax Can elect in order to defer deductions Listed property Require taxpayers to adequately substantiate the extent of an assets business use Cars, computers, cell phones, cameras Automobile limits – annual limits placed on amount of depreciation Intangibles Use amortization instead of depreciation Section 197 – 15 year amortization Depletion Used for natural resources 2 methods: cost and percentage Cost is based on quantities Percentage is based on sales using published rates...
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