Depreciation: General Concepts; Non-ACRS Rules (Portfolio 530)
At a glance
I. Introduction
II. What Is Depreciation
III. Property Subject to Depreciation
B. Property Used in Trade or Business or Held for the Production of Income
IV. Who Can Take Depreciation
C. Trusts and Estates: Owners of Life Estates and Other Beneficiaries
D. Foreign Corporation and Nonresident Aliens
V. Determining Depreciable Basis
B. Basis Equal to Fair Market Value
C. Substituted or Carryover Basis
D. Allocation of Purchase Price
VI. Accounting Procedures
VII. Retirements
B. Normal and Abnormal Retirements
C. Recognition of Gain or Loss on Retirement
VIII. Property Excluded from ACRS
B. Unit-of-Production or Other Methods Not Expressed in Years
IX. Pre-ACRS Depreciation
A. Determination of Useful Life — Reg. §1.167(a)-1
B. Administrative Guidelines for Determining Useful Life
G. Averaging Useful Lives in Order to Determine Rate — Open-End Accounts and Closed Accounts
X. Election and Changes of Method of Depreciation
XI. Amortization of Pollution Control Facilities (§169)
A. Introduction — Planning Considerations
B. Election to Amortize Pollution Control Facilities
C. Facilities that Qualify for Five-Year or Seven-Year Amortization
Abstract
Bloomberg Tax Portfolio, Depreciation: General Concepts; Non-ACRS Rules, No. 530, should be used as an adjunct to Tax Management Portfolio No. 531, Depreciation: MACRS and ACRS, under which depreciation deductions for most tangible property placed in service after 1980 are determined.
This Portfolio discusses basic depreciation issues such as what type of property is depreciable, who may take the depreciation deduction, and how to compute the basis of an asset. The Portfolio describes depreciation methods and accounting procedures applied to item and group accounts. The Portfolio also explains the methods and principal rules for computing depreciation on property placed in service before 1981, or otherwise not governed by the ACRS. The latter discussion includes the determination of useful life and salvage value. Finally, the Portfolio analyzes the special election under §169 to amortize the basis of certain pollution control facilities.