DESCRIPTION
This module provides a comprehensive overview of tax depreciation and amortization rules, focusing on asset classification, recovery periods, and applicable methods. Participants will explore key differences between Section 179 expensing and bonus depreciation, as well as the proper treatment of building improvements. The course also covers the application of repair regulations to distinguish between capitalized and deductible costs. Learners will apply these concepts through group discussions and exercises based on client fact patterns and real-world scenarios. Finally, participants will calculate depreciation recapture and Section 1231 gains and losses for asset dispositions.
LEARNING OBJECTIVES
- Explain tax rules for depreciation and amortization, including depreciable lives, applicable methods, vehicle limitations, and listed property classifications.
- Differentiate between Section 179 expensing and bonus depreciation, including eligibility requirements and limitations.
- Determine appropriate depreciation methods and recovery periods for various asset classes, including building improvements.
- Apply repair regulations to distinguish between capital expenditures and deductible expenses, including the treatment of transaction costs (optional).
- Define and distinguish between Section 1245 and Section 1250 property and their impact on depreciation recapture.
- Calculate depreciation recapture and Section 1231 gains and losses for disposed assets.
