Question

What is MACRS depreciation? table

Answer 1

MACRS depreciation is a method used for calculating the depreciation expense of assets for tax purposes. It uses specific tables to determine depreciation rates and useful lives of assets, allowing businesses to recover their investment over time through tax deductions.

Step-by-step explanation:

MACRS (Modified Accelerated Cost Recovery System) depreciation is a method used for calculating the depreciation expense of assets for tax purposes. It is commonly used in business and accounting to determine the annual deduction for the wear and tear, obsolescence, or depletion of assets over their useful lives.

The MACRS depreciation method uses specific tables to determine the depreciation rates and useful lives of different categories of assets. These tables provide a systematic way to allocate the cost of an asset over time, allowing businesses to recover their investment in the asset through tax deductions.

For example, if a company purchases a computer system with a useful life of 5 years, it would consult the MACRS table for computer equipment to determine the percentage of the asset's value that can be deducted each year. This allows the company to spread out the cost of the computer system over its useful life for tax purposes.

Answer 2

MACRS depreciation is a system used for tax purposes in the U.S. that allows businesses to depreciate property over a specific life. It uses tables by the IRS that show percentages for depreciation each year.

Step-by-step explanation:

MACRS depreciation is an acronym for Modified Accelerated Cost Recovery System. It is a method of depreciation used for tax purposes in the United States that allows businesses to depreciate the cost of property over a designated useful life. The system provides a series of depreciation tables created by the IRS that dictate the percentage of the cost that can be depreciated each year, based on the type of asset and its classified recovery period.

Under MACRS, assets are categorized into different classes, and each class has its own depreciation schedule. These schedules are designed to reflect the economic life of the asset and encourage investments by allowing faster cost recovery. MACRS consists of two systems: the General Depreciation System (GDS) and the Alternative Depreciation System (ADS).