Capitalized Costs & Depreciation - Tax Staff Essentials

Overview

How do I treat a property transaction?
You'll be able to answer this question after taking a focused look at the IRS cost and repair regulations. With an understanding of capitalized cost and depreciation rules, you can help your clients achieve significant tax savings. You'll also learn about the rules for:

Depreciation

Amortization

Like-kind exchanges

Involuntary conversions

Business property sales

Property-related timing issues

Planning opportunities

What's going on with capitalized costs and depreciation?
Course materials cover the latest legislation, including:

The requirement to capitalize and amortize Section 174 research and experimentation expenditures

Changes to bonus depreciation levels starting in 2023

The technical correction issued in the Coronavirus Aid, Relief, and Economic Security (CARES) Act

Prerequisites

None

Objectives

• Recall the initial tax basis and adjusted tax basis of business property.
• Identify the tax basis of self-constructed assets.
• Distinguish between deductible repairs and capitalized improvements.
• Recall changes in the tax rules to the classification of expenditures such as materials, supplies, repairs, and improvements.
• Recall the fundamentals of modified accelerated cost recovery system (MACRS) depreciation.
• Recognize which assets are considered listed property.
• Recognize the types of purchased intangible costs that must be capitalized.

Highlights

Tax basis of property acquisitions

Initial basis of property acquired in an exchange transaction

Materials, supplies, repairs, and improvements

Accounting method changes

Depreciation: MACRS, Section 179, and bonus

Intangible assets and amortization

Organization and start-up costs