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Can you record 100% of cost of equipment as depreciation in one year, or is it mandatory to use MACRS?

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  • Can you record 100% of cost of equipment as depreciation in one year, or is it mandatory to use MACRS?


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Answer #1 | 21/12 2013 11:56
it's the 179 depreciation allowance if your equipment qualifies
Answer #2 | 22/12 2013 16:00
A Brief Overview of Depreciation Depreciation is an income tax deduction that allows a taxpayer to recover the cost or other basis of certain property. It is an annual allowance for the wear and tear, deterioration, or obsolescence of the property. Most types of tangible property (except, land), such as buildings, machinery, vehicles, furniture, and equipment are depreciable. Likewise, certain intangible property, such as patents, copyrights, and computer software is depreciable. In order for a taxpayer to be allowed a depreciation deduction for a property, the property must meet all the following requirements: The Modified Accelerated Cost Recovery System (MACRS) is the proper depreciation method for most property. Additional information about MACRS, and the other components of depreciation are in Publication 946, How to Depreciate Property. A taxpayer must use Form 4562, Depreciation and Amortization, to report depreciation on a tax return. Form 4562 is divided into six sections and the Instructions for Form 4562 contain information on how, and when to fill out each section. Hope that you find the above enclosed information useful. 12/22/2013

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