Will Form 1120 C Depreciation 2023-2024

In this talk, I'm going to go over depreciation expense. Firstly, depreciation is calculated based on several criteria of the asset, including the type of asset, when it was placed in service, the cost basis, the business use percentage, and the applicable depreciation rules. Different methods of depreciation are used for different types of assets. For example, real estate assets, whether commercial or residential, have different rules. Personal properties such as office furniture and equipment, as well as listed property used for entertainment like cell phones or computers, also have specific depreciation rules. It's important to note that land cannot be depreciated. Personal property assets have various recovery periods based on their type. Recovery period refers to the number of years the asset is depreciated. For instance, office furniture is typically depreciated over a seven-year recovery period. If an asset is used for both personal and business purposes, depreciation expense can only be taken for the business use percentage. To determine the business use percentage, a systematic approach must be used to calculate the total personal use and business use of the asset. The business use is then divided by the total use to obtain the business use percentage, which is multiplied by the asset's cost basis. Specific guidelines are used to calculate depreciation expense for listed property assets. If these assets are not used at least 50% or more for business purposes, depreciation expense is calculated using specific guidelines. There are several methods of depreciation, including straight-line depreciation and double declining balance. With straight-line depreciation, the cost basis is allocated evenly over the life of the asset. On the other hand, double declining balance allows for a larger percentage deduction in the first years of the asset's life. Tax software can calculate depreciation for you, but it is beneficial to have a general understanding of...