MACRS
Lesson:
The Modified Accelerated Cost Recovery System (MACRS) is the method used by the IRS for calculating tax deductions on depreciation of business assets.
Each type of item has its own number of years and depreciation type (either declining balance or straight line).
You're a tax preparer, trying to figure out the depreciation of busines assets.
You've been briefed with the following facts:
- The business purchased an item categorized as 'office equipment.'
What is MACRS depreciation method for the item?
Answer:
- Office equipment is depreciated using a 7-year 200% declining balance depreciation