Overview
Depreciation, amortization, and capitalization all play an essential role in accurate tax reporting.
Prerequisites
None
Objectives
- Recall the initial tax basis of business property, including those purchased and acquired in an exchange transaction.
- Identify the tax basis of self-constructed assets.
- Distinguish between deductible repairs and capitalized improvements.
- Recall the tax treatment of expenditures for materials and supplies.
- Recall the fundamentals of modified accelerated cost recovery system (MACRS) depreciation.
- Recognize which assets are considered listed property.
- Identify intangibles that are subject to capitalization and amortization.
Highlights
Tax basis of property acquisitions
Initial basis of property acquired in an exchange transaction
Materials, supplies, repairs and improvements
Accounting method changes
Depreciation: MACRS, Section 179 and bonus
Intangible assets and amortization
Organization and start-up costs
Research and experimental expenditures
