#depreciation
Methods and strategies for depreciating fixed assets including straight-line, MACRS, and accelerated depreciation
CapEx buys assets you depreciate over years; OpEx covers costs you deduct now — and Section 179 plus the $2,500 safe harbor blur the tax line.
An EFA is an installment sale — you own the equipment from day one, repay fixed payments with no stated interest rate, and deduct it under IRS Section 179.
Vehicles and cameras lose accelerated depreciation unless business use tops 50% — and only a contemporaneous mileage log proves it. The tests, caps, and forms.
ADS swaps faster GDS write-offs for longer straight-line lives and no bonus depreciation; the IRS requires it for electing real-estate businesses.
TIC interests are deeded real estate, not partnership shares — so they can qualify for Section 1031 deferral if the co-ownership meets IRS ruling conditions.
Held for sale freezes depreciation once all six criteria are met; discontinued operations further requires a disposed component that is a strategic shift.
The IRS home office safe harbor pays $5 per square foot, max $1,500 — take it when your housing costs run under $5 per foot; otherwise run actual expenses.
Section 121 excludes home-sale gain up to $250,000/$500,000, but post-1997 home-office depreciation is carved out and taxed up to 25%.
IRS Notice 2026-11 locks in permanent 100% bonus depreciation for property acquired after Jan 19, 2025, with bigger Section 179 and expensable factories.
Section 1245 taxes equipment-sale gains as ordinary income up to the depreciation claimed — with 100% bonus, the whole sale can be recapture.
Form 8829's actual method beats the $1,500 simplified cap until sale day, when depreciation returns at up to 25% — run both numbers yearly.
Cash, debt relief, or non-like-kind property in a 1031 exchange is taxable boot up to your gain — and cash offsets mortgage boot, never the reverse.
