Publication 946 |
2000 Tax Year |
Depreciation Defined
Depreciation is a decrease in the value of property over the time
the property is being used. Events that can cause property to
depreciate include wear and tear, age, deterioration, and
obsolescence. You can get back your cost of certain property by taking
deductions for depreciation. For example, you can take a depreciation
deduction for equipment you use in your business or for the production
of income.
Types of Property
To determine if you can take a depreciation deduction for your
property, you must be familiar with the types of property. Property is
either of the following.
Tangible Property
Tangible property is property that you can see or touch. There are
two main types of tangible property.
- Real property
- Personal property
Real property.
Real property is land, buildings, and generally anything built or
constructed on land, growing on land, or attached to the land.
Personal property.
Tangible personal property includes cars, trucks, machinery,
furniture, equipment, and anything that you can see or touch, except
real property.
Intangible Property
Intangible property is generally any property that has value but
that you cannot see or touch. It includes items such as computer
software, copyrights, franchises, patents, trademarks, and trade
names.
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