U.S. Master Depreciation Guide (2023)

Old depreciation systems do not die--or even fade away very fast.  Businesses and the practitioners that serve them must operate with three coexisting depreciation systems--Modified Accelerated Cost Recovery System (MACRS), the Accelerated Cost Recovery System (ACRS), and the Treasury Department's Asset Depreciation System (ADR).

The U.S. Master Depreciation Guide offers tax and accounting professionals who work with businesses a one-stop resource for guidance in understanding and applying the complex depreciation rules to their fixed assets. This area is especially challenging, because bits and pieces of applicable information must be gathered from a maze of Revenue Procedures, IRS Tables, and IRS Regulations. These sources are frequently old and include some materials that may no longer be applicable. The U.S. Master Depreciation Guide pulls the pieces together, so practitioners can make sense of all the corresponding information and put the information into practice.

The U.S. Master Depreciation Guide includes several useful “quick reference tables.” These include a list of trucks, SUVs, and vans that are exempt from the luxury car caps because they weigh more than 6,000 pounds, trucks with a bed-length under six feet that are subject to a $25,000 section 179 depreciation cap, a list of states that conform to the federal bonus depreciation rules, and a comprehensive table of assets and corresponding recovery periods with cross references to the location of the related U.S. Master Depreciation Guide explanation.

Published annually, this new edition is completely updated to reflect all depreciation rule changes through press time in December, including recent COVID-19 legislation is reflected throughout. A special Highlights section provides a quick overview of any new legislation, cases, rulings, and regulations occurring since last year’s edition, with cross-references to the explanation paragraph in which they are reflected.

Contents:

The Guide presents a concise yet comprehensive discussion of the depreciation rules. It includes discussion of the historical background of depreciation and depreciation fundamentals including coverage of the following topics: 

1. Modified Accelerated Cost Recovery System (MACRS), which applies to most tangible depreciable property in service after 1986;
2. Accelerated Cost Recovery System (ACRS) which applies to property placed in service after 1980 and before 1987;
3. General rules for pre-1981 property;
4. Asset Depreciation Range (ADR) system which dates back to 1971;
5. Code Sec. 179 expensing rules;
6. Amortization of intangibles, including 15-year section 197 intangibles; and
7. Luxury car depreciation cap rules and listed property depreciation rules.

The Guide also discusses accounting method changes required to comply with MACRS regulations dealing with general asset accounts and dispositions, including retirements of structural components. A handy reference chart of these changes is provided.

Other highlights include:

• Lease inclusion tables for rented vehicles
• Handling vehicle trade-ins, including luxury car caps and carryover basis
• Rev. Proc. 87-56 class life and depreciation period table reproduced in full text
• All MACRS depreciation tables reproduced in full text
• How to compute MACRS with and without percentage tables
• Computing depreciation in short tax years
• Change-in-use depreciation computations
• Like-kind exchange and involuntary conversion depreciation computations
• MACRS general asset account depreciation computations
• Identifying and depreciating land improvements
• MACRS depreciation rules for farm property, including a farm asset classification table
• Handling building improvements, whether or not made under a lease
• What to do if incorrect depreciation is claimed (amended return and change-of-accounting method rules)
• Cost segregation rules allowing shortened recovery periods of building components
• Comprehensive IRS tables for retail stores, restaurants, auto dealerships, and casinos listing components of real property that qualify for shorter recovery periods
• Partial disposition election rules for claiming losses on retired structural components
• Depreciation recapture rules
• Alternative Minimum Tax depreciation rules
• Abandonment, retirement, and obsolescence deductions
• Recovery of software costs
• Depreciation planning, including choice of method, recapture and Code Sec. 179 planning issues

Additional helpful assistance is provided by Appendices which include final, temporary and proposed regulations relating to ACRS, MACRS, bonus depreciation, and Code Sec. 179 expensing.

The U.S. Master Depreciation Guide also includes a Case Table, Official Source Finding Lists that provide cross references to all cases and rulings contained in the text of the Guide, and detailed Table of Contents and Topical Indexes to help quickly locate needed information. It comes complete with Wolters Kluwer’s exclusive Quick Facts Card for convenient, at-a-glance reference to key depreciation figures.

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