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7 - Depreciation and Tax

7 - Depreciation and Tax - Depreciation and Income...

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8/17/2011 R B McCann 1 8/17/2011 Depreciation and Income Taxes "The hardest thing in the world to understand is the income tax." - Albert Einstein © R B McCann 2002-11 All rights reserved. It’s What You Keep That Matters © R B McCann - 2
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8/17/2011 R B McCann 2 8/17/2011 Economic Analysis Economic anal sis is based on cash flo Economic analysis is based on cash flow, not net income. We care about income tax because it has a significant impact on cash flows. We care about net income because it © R B McCann - 3 determines income tax. We care about depreciation because it affects the timing of income tax. Depreciation and Income Taxes Outline: Net income review Book depreciation Tax depreciation Income tax © R B McCann - 4 Corporate and personal
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