Question 1

What is depreciation?

Accepted Answer

Per IRS Publication 946, "depreciation is an annual income tax deduction that allows you to recover the cost or other basis of certain property over the time you use the property. It is an allowance for the wear and tear, deterioration, or obsolescence of the property."

Question 2

What is MACRS depreciation?

Accepted Answer

MACRS or Modified Accelerated Cost Recovery System was designed by Congress and implemented by the IRS for depreciating the cost of assets. MACRS replaced ACRS (Accelerated Cost Recovery System) in 1986.

Question 3

What Property Can Be Depreciated?

Accepted Answer

Per IRS Publication 946, "you can depreciate most types of tangible property (except land), such as buildings, machinery, vehicles, furniture, and equipment. You also can depreciate certain intangible property, such as patents, copyrights, and computer software."

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