#depreciation
Depreciation
Methods and strategies for depreciating fixed assets including straight-line, MACRS, and accelerated depreciation
100% Bonus Depreciation Is Back: How Small Businesses Combine Section 168(k) and Section 179 in 2026 to Write Off Equipment the Year They Buy It
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.
Asset Retirement Obligations Under ASC 410: How Operators Record the Future Cost of Restoring a Site at Day One
ASC 410-20 requires recognizing an asset retirement obligation on day one — the day the well is drilled, the tower is erected, or the leasehold build-out is finished. A walkthrough of triggers, fair-value measurement using the credit-adjusted risk-free rate, annual accretion as operating expense, the lease-vs-ARO boundary under ASC 842, and the journal entries operators in oil and gas, telecom, and retail most often get wrong.
De Minimis Safe Harbor: How Small Businesses Expense Equipment Up to $2,500 Without Depreciation
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.
Bookkeeping for Short-Term Rental Hosts: Schedule E vs. Schedule C, the 7-Day Average Stay Rule, and Material Participation
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.
Form 6252 and Installment Sales: A Working Guide to Section 453
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.
Form 6252 Installment Sales Under Section 453: Spreading Capital Gains and Avoiding the 453A Interest Charge
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.
Form 8308 and Section 751 Hot Assets: How a Partnership Sale Turns Capital Gain Into Ordinary Income
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.
Form 8308 and Section 751 Hot Assets: Why Selling Your Partnership Interest Often Costs More Than You Think
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 Demystified: How Partnerships and S-Corps Report Rental Real Estate Without Triggering an IRS Letter
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.
Schedule F: Farm Tax Reporting, Disaster Deferrals, and Income Averaging Explained
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.
Corporate Alternative Minimum Tax (CAMT): How the 15% Book-Income Levy on $1B+ Companies Actually Works
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.
Section 1245 vs. Section 1250: How Depreciation Recapture Erodes Your Bonus Depreciation Benefits
When you sell depreciated business property, Section 1245 recaptures prior depreciation as ordinary income (up to 37%), while Section 1250 caps the recapture on real estate at 25% — turning a 100% bonus depreciation deduction into a large tax bill at exit unless you plan with cost segregation, 1031 exchanges, and a clean fixed-asset register.