Depreciation-2012-a-summary

forestsaintregisΠετρελαϊκά και Εξόρυξη

8 Νοε 2013 (πριν από 3 χρόνια και 9 μήνες)

68 εμφανίσεις


2012
Depreciation


A
Summary

Copyright Oxford University Press 2009


The Modified Accelerated cost Recovery
System is used for tax basis depreciation. A
full and complete description of the rules can
be found at
IRS Publication 946
-

How to
Depreciate Property


Advantages of Modified Accelerated
Cost Recovery System


50
percent bonus depreciation for qualifying assets placed
in service between January
1,2010
and September 9,
2010



100 percent bonus depreciation for qualifying assets placed
in service September
9, 2010
and all of
2011



50 percent bonus depreciation for qualifying assets placed
in service between January
1, 2012
and December 31,
2012

Bonus Depreciation 2010
-

2012

Copyright Oxford University Press 2009


The
Small Business Jobs Act
increased the maximum
deduction to $500,000 for 2010
and 2011
with a phase
-
out
threshold of $2 million
.



The maximum Section 179 deduction was set to return to
$25,000 with a phase
-
out threshold
of$200,000
in 2012.
The Tax Relief Act increased the maximum Section 179
deduction for
2012to
$125,000 (adjusted for inflation) and
increased the phase
-
out threshold to $500,000


(adjusted for inflation).


Section 179 Deduction

1.
Determine if a property is eligible for depreciation

2.
Determine the asset’s cost basis (B)


Cost to obtain and place the asset in service fit for use


For real property, the basis may include certain fees and
charges, such as legal and recording fees, abstract fees,
survey charges, transfer taxes, title insurance, …

3.
Determine the property class and recovery period


Use property class given in problem


Match asset name with MACRS
-
GDS property classes
definition (Table 11
-
2)


Use IRS publication, such as Table 11
-
1


Use ADR class life to determine property class

Procedures in Applying

MACRS
-
GDS Depreciation

Copyright Oxford University Press 2009

Table 11
-
1 Example Class Lives

and MACRS Property Classes

IRS
Asset
Class


Asset Description

Class Life
(years)

ADR

MACRS Property
Class (years)

GDS

ADS

00.11

Office furniture, fixtures, and equipment

10

7

10

00.12

Information Systems: computer/peripheral

6

5

6

00.22

Automobiles, taxis

3

5

5

00.241

Light general
-
purpose trucks

4

5

5

00.25

Railroad cars and locomotives

15

7

15

00.40

Industrial steam and electric distribution

22

15

22

01.11

Cotton gin assets

12

7

12

01.21

Cattle, breeding or dairy

7

5

7

13.00

Offshore drilling assets

7.5

5

7.5

13.30

Petroleum refining assets

16

10

16

15.00

Construction assets

6

5

6

Copyright Oxford University Press 2009

Table 11
-
1 Example Class Lives

and MACRS Property Classes

IRS
Asset
Class


Asset Description

Class Life
(years)

ADR

MACRS Property
Class (years)

GDS

ADS

21.10

Manufacture of grain and grain mill products

17

10

17

22.2

Manufacture of yarn, thread, and woven fabric

11

7

11

24.10

Cutting of timber

6

5

6

32.20

Manufacture of cement

20

15

20

37.11

Manufacture of motor vehicles

12

7

12

48.11

Telephone Communications assets and buildings

24

15

24

48.2

Radio and television broadcasting equipment

6

5

6

49.12

Electric utility nuclear production plant

20

15

20

49.13

Electric utility steam production plant

28

20

28

49.23

Natural gas production plant

14

7

14

50.00

Municipal wastewater treatment plant

24

15

24

80.00

Theme and amusement park assets

12.5

7

12.5

Copyright Oxford University Press 2009

Table 11
-
2

MACRS GDS Property Classes

Property Class

Personal Property (all property except real estate)

3
-
Year Property


Special handling devices for food and beverage manufacture


Special tools for the manufacture of finished plastic products, fabricated
metal products, and motor vehicles


Property with ADR class life of 4 years or less

5
-
Year Property


Automobiles and trucks (The depreciation for automobiles is limited to
$2960 the first tax year, $4700 the second year, $2850 the third year, and
1675 per year in subsequent years.)


Aircraft (of non
-
air
-
transport companies)


Equipment used in research and experimentation


Computers


Petroleum drilling equipment


Property with ADR class life of more than 4 years and less than 10 years

7
-
Year Property


All other property not assigned to another class


Office furniture, fixtures, and equipment


Property with ADR class life of 10 years or more and less than 16 years

Copyright Oxford University Press 2009

Table 11
-
2

MACRS GDS Property Classes

Property Class

Personal Property (all property except real estate)

10
-
Year Property


Assets used in petroleum refining and certain food products


Vessels and water transportation equipment


Property with ADR class life of 16 years or more and less than 20 years

15
-
Year Property


Telephone distribution plants


Municipal sewage treatment plants


Property with ADR class life of 20 years or more and less than 25 years

20
-
Year Property


Municipal sewers


Property with ADR class life of 25 years or more

Property Class

Real Property (real estate)

27.5 Year

Residential rental property (does not include hotels and motels)

39 Years

Nonresidential real property

Copyright Oxford University Press 2009

Table 11
-
3

MACRS GDS Percentage Rate


Using Half
-
Year Convention

Recovery
Year

3
-
Year

Class

5
-
Year

Class

7
-
Year

Class

10
-
Year
Class

15
-
Year
Class

20
-
Year
Class


1

33.33

20.00

14.29

10.00

5.00

3.750


2

44.45

32.00

24.49

18.00

9.50

7.219


3

14.81*

19.20

17.49

14.40

8.55

6.677


4


7.41

11.52*

12.49

11.52

7.70

6.177


5

11.52

8.93*


9.22

6.93

5.713


6

5.76

8.92


7.37

6.23

5.285


7

8.93

6.55*

5.90*

4.888


8


4.46

6.55

5.90

4.522


9

6.56

5.91

4.462*


10

6.55

5.90

4.461


11

3.28

5.91

4.462


12
-
15

5.90

4.461


16

2.95

4.461


17
-
20

4.462


21

2.231

Copyright Oxford University Press 2009

Table 11
-
4

MACRS GDS Percentage Rate

Residential Rental Property

Recovery

Year


Month Placed in Service

1

2

3

4

5

6

7

8

9

10

11

12

1

3.485

3.182

2.879

2.576

2.273

1.970

1.667

1.364

1.061

0.758

0.455

0.152

2
-
27

3.636

3.636

3.636

3.636

3.636

3.636

3.636

3.636

3.636

3.636

3.636

3.636

28

1.970

2.273

2.576

2.879

3.182

3.485

3.636

3.636

3.636

3.636

3.636

3.636

29

0.152

0.455

0.758

1.061

1.364

1.667

Recovery

Year


Month Placed in Service

1

2

3

4

5

6

7

8

9

10

11

12

1

2.461

2.247

2.033

1.819

1.605

1.391

1.177

0.963

0.749

0.535

0.321

0.107

2
-
39

2.564

2.564

2.564

2.564

2.564

2.564

2.564

2.564

2.564

2.564

2.564

2.564

40

0.107

0.321

0.535

0.749

0.963

1.177

1.391

1.605

1.819

2.033

2.247

2.461

Nonresidential Real Property

Copyright Oxford University Press 2009

Example 11
-
6 Calculation of

MACRS GDS Depreciation

7
-
year property class, B=$150000, S=$30000


Year


MACRS %


MACRS Calculation

MACRS
Depreciation, d
t


Book Value

0


$150,000

1

14.29%

($150000)(14.29%)


$21,435


128,565

2

24.49%

(150000)(24.49%)


36,735


91,830

3

17.49%

(150000)(17.49%)


26,235


65,595

4

12.49%

(150000)(12.49%)


18,735


46,860

5

8.93%

(150000)(8.93%)


13,395


33,465

6

8.92%

(150000)(8.92%)


13,380


20,085

7

8.93%

(150000)(8.93%)


13,395


6,690

8


4.46%

(150000)(4.46%)


6,690


0

Copyright Oxford University Press 2009

Example 11
-
7 Calculation of

MACRS GDS Depreciation

39
-
year property class, B=$2,000,000, purchased in April,
disposed 5 years later in August


Year

MACRS
%


MACRS Calculation

MACRS
Depreciation, d
t


Book Value

0


$2,000,000

1

1.819%

($2000000)(1.819%)


$36,380


1,963,620

2

2.564%

(2000000)(2.564%)


51,280


1,912,340

3

2.564%

(2000000)(2.564 %)


51,280


1,861,060

4

2.564%

(2000000)(2.564 %)


51,280


1,809,780

5

2.564%

(2000000)(2.564 %)


51,280


1,758,500

6

2.564%

(7.5/12)(2000000)(2.564 %)


32,100


1,726,400


273,600