1250(a) would recapture only a percentage of the lesser of total recognized gain or "excess" depreciation (i.e., the difference between the actual depreciation taken over straight-line depreciation
: $154,000 / 36 (months in recovery period) x 7 (months in 2003) = $29,944
The change from straight-line depreciation
over a 31.5- or 39-year period to the DB method over a 15-year period, however, involves the timing of deductions rather than the total amount of lifetime income.
D took $102,500 in modified accelerated cost recovery system (MACRS) straight-line depreciation
deductions, reducing the property's adjusted basis to $397,500.
This reduces the $100 of current E&P by $80 (the difference between accelerated and straight-line depreciation
), leaving only $20 of E&P for distribution to all 20% corporate shareholders.
85, discussed the treatment of long-term capital gains recognized after May 6, 1997, from an installment sale occurring before that date, in which the installment sale gain included an element of straight-line depreciation
1(h)(1)(B) and (h)(6) recapture the accumulated depreciation to the extent of straight-line depreciation
at a 25% rate; only gain in excess of the initial predepreciation basis will qualify for the new 20% long-term capital gains rate.
Accumulated depreciation on the building through the date of sale was $50,000; straight-line depreciation
would have been $40,000.
The restriction, however, is that straight-line depreciation
must be used from that point forward over the vehicle's remaining life (Rev.
Historically, however, courts considered straight-line depreciation
The county's appraiser considered depreciation and applied a $1.11 million allowance for physical depreciation based on the Marshall Valuation Service (MVS) curvilinear depreciation tables (he believed the straight-line depreciation
would inaccurately reflect changes in value over time).
However, the timeline for recovering the cost through tax deductions is painfully long, as typically, this property is depreciated over 39 years (or 27.5 years for residential rental property) using straight-line depreciation
. Fortunately, some of the other costs associated with realty can be expensed more quickly.