#depreciation
Methods and strategies for depreciating fixed assets including straight-line, MACRS, and accelerated depreciation
A practical guide to Section 469 for real estate investors and side-business owners — the seven material participation tests, the $25,000 active-rental allowance, the real estate professional carve-out, the short-term rental angle, and the disposition rules that release suspended losses.
100% bonus depreciation under Section 168(k) is permanent again for property placed in service after January 19, 2025, and Section 179's 2026 limit is $2,560,000. This guide shows how small businesses combine both to deduct equipment the year it is bought, with a worked $1.2M example and the disqualification traps to avoid.
ASC 410-20 requires recording an ARO on day one—when drilling, erecting, or build-out finishes.
A small business with a written capitalization policy dated before the tax year begins and an annual election attached to its return can deduct tangible property up to $2,500 per item or invoice ($5,000 with an applicable financial statement) under Treas. Reg. §1.263(a)-1(f), skipping depreciation schedules entirely.
How Airbnb and Vrbo hosts classify income on Schedule E vs. Schedule C, calculate the 7-day average stay, and document material participation to unlock non-passive losses against W-2 wages.
A practical guide to Section 453 installment sales and Form 6252 — how the gross profit ratio defers capital gains across years, when depreciation recapture forces year-one recognition, how the Section 453A interest charge applies above the $5 million threshold, and when electing out beats deferral.
A practical walk-through of reporting installment sales on Form 6252 under IRC Section 453 — computing the gross profit percentage, why depreciation recapture is taxed in year one, the 453A interest charge on notes above the $5M aggregate threshold, the two-year related-party resale rule, and when electing out beats deferring gain.
When a partner sells an LLC or partnership interest, Section 751 can recharacterize a large share of the gain as ordinary income taxed up to 37 percent. Form 8308 is the partnership's required disclosure of that hot-asset gain on Form 1065, with a January 31 furnishing leg and a return-due-date filing leg in 2026.
Selling a partnership interest can convert expected capital gain into ordinary income under Section 751, raising the federal tax bill on the recharacterized slice from 23.8 percent to 37 percent. This guide explains Form 8308, hot-asset categories, the January 31 partner statement deadline, and what sellers, buyers, and partnership administrators need to do for 2025 and 2026 transfers.
Form 8825 consolidates partnership and S-corp rental real estate activity, with line 21 flowing to Schedule K-1 box 2 where each owner applies the passive activity loss rules under Section 469. The December 2025 revision splits gross rents from other rental income and adds Schedule A's twenty named expense categories for Schedule M-3 filers. Owners hit basis, at-risk, and passive walls in that order before a loss reaches Form 1040.
A practical walkthrough of Schedule F for farmers and ranchers, covering crop insurance deferral under Section 451, weather-related livestock relief (Section 451(g) and 1033(e)), Section 175 soil and water conservation deductions capped at 25% of farm gross income, Section 179 and bonus depreciation, and Schedule J income averaging using elected farm income across three base years.
The Corporate Alternative Minimum Tax imposes a 15% levy on Adjusted Financial Statement Income for corporations averaging over $1 billion in AFSI. A practical guide to who qualifies, how AFSI is computed under section 56A, the FPMG $100M U.S. test, Form 4626 mechanics, and the interim simplified safe harbor.
