5 years for residential rental property) using
straight-line depreciation.
Allowing for an immaterial difference in the initial year, North Carolina's convention for bonus depreciation is essentially
straight-line depreciation over six years, regardless of the modified accelerated cost recovery system (MACRS) recovery period.
As a general rule, the cost of commercial real estate improvements is recovered over 39 years via
straight-line depreciation.
There are four possible accounting methods, all of which employ
straight-line depreciation with various lives (four or five years) and with various salvage values ($0 or $1,000).
Interest expense for a finance lease is calculated using the effective interest method, and depreciation expense is typically measured using
straight-line depreciation.
A building, termed "section 1250 property", is generally 39-year property eligible for
straight-line depreciation and equipment or furniture termed "section 1245 property", is personal property.
The two companies use different depreciation policies: HJ depreciates its noncurrent assets using
straight-line depreciation at the rate of 20 per cent of cost with no residual value; KL uses the reducing-balance method at 25 per cent per annum.
The
straight-line depreciation method is used for the new plant for its useful-life of 10 years.
However, the IRS looks more closely at a business choosing alternative depreciation methods, even
straight-line depreciation for newly-acquired property, rather than using the no-questions-asked modified asset cost recovery system.
2006) with an aggregate historic cost of $11,000m, aggregate depreciated historic cost of $3200m, depreciation of $538m, and it uses the
straight-line depreciation methodology.
Although
straight-line depreciation is permitted for tax purposes, many businesses are advised to use accelerated methods of depreciation.
During the first six years the taxpayer depreciated $323,064 of the building using 39-year,
straight-line depreciation.
