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  2. MACRS - Wikipedia

    en.wikipedia.org/wiki/MACRS

    The 3-, 5-, 7-, and 10-year classes use 200% and the 15- and 20-year classes use 150% declining balance depreciation. All classes convert to straight-line depreciation in the optimal year, shown with an asterisk (*). A half-year depreciation is allowed in the first and last recovery years.

  3. What Is Depreciation? Importance and Calculation Methods ...

    www.aol.com/finance/depreciation-importance...

    For example, under MACRS, computers or machinery may be depreciated at a 200% declining balance rate. This would result in higher early-year deductions and improved cash flow for reinvestment.

  4. Half-year convention - Wikipedia

    en.wikipedia.org/wiki/Half-year_convention

    Like other conventions, the half-year convention affects the depreciation deduction computation in the year in which the property is placed into service. Using the half-year convention, a taxpayer claims a half of a year's depreciation for the first taxable year, regardless of when the property was actually put into service.

  5. Accelerated depreciation - Wikipedia

    en.wikipedia.org/wiki/Accelerated_depreciation

    a) Normal depreciation: the company claims $100 in depreciation every year and has a tax profit of $100; it must pay tax of $20 on the $100 gain. Over ten years, $200 in taxes are paid. b) Accelerated depreciation: the company claims $200 in depreciation for the first five years, and nothing for the last five years.

  6. Overhead (business) - Wikipedia

    en.wikipedia.org/wiki/Overhead_(business)

    Therefore, this value in depreciation is calculated as a manufacturing overhead. Moreover, this also applies to vehicles as they tend to depreciate significantly after the first year. When calculating manufacturing overheads, accountants mainly use two methods: straight-line method and declining balance method. [22]

  7. Tax deduction - Wikipedia

    en.wikipedia.org/wiki/Tax_deduction

    The annual depreciation deduction may be computed on a straight line, declining balance, or other basis, as permitted in each country's rules. [29] Many systems allow amortization of the cost of intangible assets only on a straight-line basis, generally computed monthly over the actual expected life or a government specified life. [30]

  8. Income tax in the United States - Wikipedia

    en.wikipedia.org/wiki/Income_tax_in_the_United...

    The capitalized costs are then deductible as depreciation (see MACRS) or amortization over the period future benefits are expected. [45] Examples include costs of machinery and equipment and costs of making or building property. IRS tables specify lives of assets by class of asset or industry in which used.

  9. Amortization (tax law) - Wikipedia

    en.wikipedia.org/wiki/Amortization_(tax_law)

    In tax law, amortization refers to the cost recovery system for intangible property.Although the theory behind cost recovery deductions of amortization is to deduct from basis in a systematic manner over an asset's estimated useful economic life so as to reflect its consumption, expiration, obsolescence or other decline in value as a result of use or the passage of time, many times a perfect ...