How to Depreciate Property: Tax Bible Series 2016

How to Depreciate Property
This . explains how you can recover the cost of business or income-producing property through deductions for depreciation (for example, the special depreciation allowance and deductions under the Modified Accelerated Cost Recovery System (MACRS)). It also explains how you can elect to take a section 179 deduction, instead of depreciation deductions, for certain property, and the additional rules for listed property.
Depreciation is an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property. It is an allowance for the wear and tear, deterioration, or obsolescence of the property.
This chapter discusses the general rules for depreciating property and answers the following questions.
• What property can be depreciated?
• What property cannot be depreciated?
• When does depreciation begin and end?
• What method can you use to depreciate your property?
• What is the basis of your depreciable property?
• How do you treat repairs and improvements?
• Do you have to file Form 4562?
• How do you correct depreciation deductions?