Accelerated depreciation is a method for allocating the cost of an asset in a manner that provides greater deductions in the earlier years of the asset's life. This method is advantageous for tax purposes, offering businesses the opportunity to defer tax payments.
A method of dividing real estate improvements into various parts such as the roof, plumbing, electrical system, and shell, and then depreciating each component separately for tax purposes.
Declining Balance Depreciation is a method of depreciation, often used for income tax purposes, whereby a rate is applied to the remaining balance to derive the depreciation deduction. Compare with Accelerated Depreciation. See Modified Accelerated Cost Recovery System.
Depreciable real estate refers to property used in a trade or business or for investment purposes that is subject to depreciation deductions under Section 167 of the Internal Revenue Code. This typically includes both residential and commercial properties, excluding the value of the land.
Depreciation (Tax) refers to an annual tax deduction for wear and tear and loss of utility of property. It allows property owners to account for the decrease in value of their real estate assets over time.
Depreciation methods are accounting techniques used to allocate the cost of an asset over its useful life. These methods help businesses recognize the wearing out, aging, or decrease in value of an asset.
Straight-Line Depreciation is a method that applies equal annual reductions in the book value of a property. It is primarily used in accounting for replacement and tax purposes.
