ISE2014_Class22

ISE2014_Class22 - Class 22 MACRS & Taxes Intro ISE 2014...

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Click to edit Master subtitle style Class 22 – MACRS & Taxes Intro ISE 2014 Fall 2010
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Today’s Class We’ll do a quick MACRS refresher We’ll work some MACRS problems We’ll introduce taxes
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MACRS Refresher So MACRS is the government’s depreciation methods as allowed by law GDS we’ll use the table 7-3 in your text ADS we’ll use SL with a half-year convention If a problem says to “use MACRS” it means GDS unless it specifically says otherwise
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MACRS Process 1. Determine the Property Class of the asset Table 7.2 or 7.4 if unknown asset 2. Determine the Recovery Period based on the Property Class Table 7.2 or 7.4 if unknown asset 3. Apply GDS or ADS method Use Table 7.3 in text for GDS Use SL with half-year for ADS
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Notes on MACRS MACRS assumes a market value of zero at end of useful life In other words, MACRS always ignores market value Determining Class Life can be tricky Table 7.2 lists some common property classes If you know the useful life but nothing else about the asset, you can use Table 7.4 to get
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Example 1: Problem 7-10
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This note was uploaded on 02/28/2011 for the course ISE 2014 at Virginia Tech.

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ISE2014_Class22 - Class 22 MACRS & Taxes Intro ISE 2014...

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