This chapter discusses the general rules for depreciating property.
It is divided into seven major sections.
- Depreciation Defined. This section defines
depreciation. It also defines the two types of property --
tangible and intangible -- and discusses real property and
personal property.
- Who Can Claim Depreciation. This section
identifies those who can claim depreciation and provides
examples.
- What Can Be Depreciated. This section discusses
what types of tangible and intangible property you can depreciate. It
also discusses how you can depreciate partial business-use property.
Finally, it discusses depreciation of land preparation costs, repairs
and replacements, durable containers, cooperative apartments, and
other special situations.
- What Cannot Be Depreciated. This section
discusses the different kinds of property that cannot be depreciated.
It specifically addresses the treatment of property placed in service
and disposed of in the same year, inventory, leased property, term
interests in property, and more.
- When Depreciation Begins and Ends. This section
discusses when property is considered placed in service, when the
basis of property is fully recovered, and when property is retired
from service.
- How To Claim Depreciation. This section discusses
when to use Form 4562, Depreciation and Amortization. It
also contains a table that outlines the purpose of each part of Form
4562.
- Incorrect Amount of Depreciation Deducted. This
section discusses what to do when you deducted the incorrect amount of
depreciation. It covers amending your return and changing your method
of accounting.
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