Alternative Depreciation Schedule

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Alternative Depreciation Schedule

In the Modified Accelerated Cost Recovery System, a system of depreciation in which the cost of purchasing an asset is recovered over a fairly long period of time. This shows the asset as having a higher value each year. Therefore, the owner has a higher net worth than he/she would using the General Depreciation Schedule.
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Such property is eligible for bonus depreciation even if the taxpayer elects to depreciate it over an alternative depreciation system life that exceeds 20 years.
property required to be depreciated under the alternative depreciation system (ADS) does not apply).
TC Memo 2003-75, Green's prior depreciation deductions had to be reduced, because they should have been computed using the alternative depreciation system for tangible property used outside the U.
As soon as it fails, the straight-line alternative depreciation system (ADS) must be used (generally, a six-year life), with the excess ADS depreciation previously taken on the airplane recaptured into income.
Property subject to the alternative depreciation system of Sec.
Alternatively, the taxpayer can elect to use the alternative depreciation system (ADS), which permits use of either the 150% declining balance or the straight-line method over a five-year life; see Sec.
To eliminate additional computations for tentative alternative minimum tax and adjusted current earnings adjustments, many organizations are using the longer lives and straight-line depreciation methods of the alternative depreciation system.
The table above (top} summarizes some of the alternative depreciation system recovery periods.
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