GBD2 Acct

GBD2 Acct - 4th April 2011 Module 3 Group5 GDB 2 RE...

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4 th April 2011 Module 3, Group5, GDB 2 RE: Question 4: Taxpayers typically attempt to get the most depreciation as possible. Describe the importance of properly classifying assets. The classifications of assets are categorized as real property (realty) or personal (personally) (Willis, Hoffman, Maloney, & Raabe 2010). To evaluate the taxation on assets, one has to properly classify the assets. Depending on which recovery method one uses, the recovery periods are different and have different implications. Tax benefits of assets are extremely useful in businesses. The recovery method a business uses depends on whether it is a qualified in nature i.e. will drop in price, usual deprecation, or have a useful life. If these assets do not meet these qualifications, they cannot take the cost recovery. Personal property can be depreciated considerably faster than real property. Personal property uses a schedule of depreciation depending on its useful life. Useful life is considered by it being at optimum use. The way one categorizes an assets will give the asset the schedule to
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GBD2 Acct - 4th April 2011 Module 3 Group5 GDB 2 RE...

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