Tag Archive for Personal Property

Casualty Under The Internal Revenue Code—Part 2

Harold Goedde

This article is part 2 of a three-part series which discusses how to determine the amount of the loss for personal use and income producing property, amount deductible, and tax year for the deduction (part 1 can be found here). We will discuss gains, including deferring the gain for income producing property by purchasing replacement property-qualifying property, time period for replacement, realized and recognized gain, and basis of new property in the final installment.

Read More

Written by | Posted in IRS • Tax Education • Tax Fraud/Evasion/Crimes • TaxConnections

Basis and Depreciation: A Review for Tax Professionals Part VI

Calculating the Depreciation Using GDS –

Once you have determined an asset’s class life, recovery period, and convention it is time to refer to the depreciation tables at the back of your text. If the asset you are calculating depreciation for is not a newly placed asset, you must know the date the asset was placed into service so that you use the appropriate recovery percentage. You will find the depreciation tables in IRS Pub 946 starting on page 70, all table references are from that publication. (http://www.irs.gov/pub/irs-pdf/p946.pdf) Table A-1 will be used for all GDS HY convention property.

For Example: Using table A-1, if a piece of 5 year property was placed into service in 2012 Read More

Written by | Posted in Individual • Real Estate

Basis and Depreciation: A Review for Tax Professionals Part V

Once you have determined your property is depreciable you must determine the class life assigned by the IRS. The Table of Asset Class Lives and Recovery Periods (CLDR) is used for this purpose. It can be located on the IRS website.

There are two methods of determining class life for a piece of non-real property, the General Depreciation System (GDS) or the Alternative Depreciation System (ADS). GDS uses a method that allows the expense for the property to be recovered more quickly in the earlier years of it”s class life. And ADS is a straight line method which basically takes the number of years of the class life and depreciates an equal amount each year over the entire life of the property. Read More

Written by | Posted in Individual • Real Estate

Basis and Depreciation: A Review for Tax Professionals – Part IV

Now that we have reviewed the items necessary to have in hand before you can start to calculate an asset’s depreciation, let’s review which of the uses of property would give rise to needing depreciation in the first place.

There can be some confusion between personal type property (real or personal) and personal-use property. Since, in most cases, personal-use property is not depreciated as it is used for personal and not business reasons, when we refer to “personal property” while talking about depreciation we are talking about personal type property that is business use.

For the most part, depreciation is taken on business use property. As mentioned above, Read More

Written by | Posted in Individual • Real Estate