Academic journal article Journal of Accountancy

General Asset Account Depreciation

Academic journal article Journal of Accountancy

General Asset Account Depreciation

Article excerpt

The Internal Revenue Service issued proposed regulations to simplify depreciation computations by allowing taxpayers to elect to combine similar assets into a general asset account, which is depreciated as a single asset (proposed regulations 1.168(i)-1, PS-55-89).

A general asset account is to include assets placed in service in the same tax year that have the same class, depreciation method, recovery period and first-year convention (that is, either half-year or mid-quarter convention).

Assets subject to the midquarter convention may be grouped only into an account with other assets placed in service in the same quarter, and passenger vehicles subject to the depreciation caps must be grouped into a separate general asset account.

As a price tag for the convenience of a single depreciation computation, the taxpayer must recognize full ordinary income with no basis offset on the sale of any asset from a general asset account. However, the ordinary income treatment is limited to the original cost in the account less any amounts previously recognized as ordinary income from disposition. …

Search by... Author
Show... All Results Primary Sources Peer-reviewed

Oops!

An unknown error has occurred. Please click the button below to reload the page. If the problem persists, please try again in a little while.