Depreciation, Cost Recovery, Amortization, and Depletion
Chapter Introduction
LO.1State the rationale for allowing the cost recovery of an asset.
LO.2Determine the amount of cost recovery under the Modified Accelerated Cost Recovery System (MACRS).
LO.3Recognize when and how to make the § 179 expensing election, use additional first-year depreciation, and calculate the amount of these deductions as part of the MACRS calculation.
LO.4Identify listed property and apply the deduction limitations on listed property and on luxury automobiles.
LO.5Determine when and how to use the alternative depreciation system (ADS).
LO.6Report cost recovery deductions appropriately.
LO.7Identify intangible assets that are eligible for amortization and calculate the amount of the deduction.
LO.8Determine the amount of depletion expense, including being able to apply the alternative tax treatments for intangible drilling and development costs.
LO.9Identify tax planning opportunities for cost recovery, amortization, and depletion.
