Answered: Explain why accelerated depreciation…

Business

Accounting

Explain why accelerated depreciation methods are superior to straight-line methods for income tax purposes.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter10: Cost Recovery On Property: Depreciation, Depletion, And Amortization

Section: Chapter Questions

Problem 9DQ

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Question

Explain why accelerated depreciation methods are superior to straight-line methods for income tax purposes.

Expert Solution

Step 1 < Introduction>

Depreciation refers to the reduction in the price of value of assets due to its wear and tear. Basically ,it is a gradual decrease in value of asset each year. Machinery, equipment and currency are some assets which decreases due to gradual depreciation charged. There are various methods which can be used for charging the depreciation.

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Section 179 Deduction and Modified Accelerated Cost Recovery System (MACRS) Depreciation

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