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Cost Recovery Period

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Cost Recovery Period
The number of years it takes to fully depreciate a capital asset. This time period is based on classification of the depreciable life of an asset.

Cost Recovery Period
The amount of time that it takes for an asset to depreciate from its purchase price to its salvage value. In other words, the cost recovery period is an amount of time equal to the useful life of the asset. Very often, the IRS assigns a cost recovery period for different assets to head off disputes before they begin. See also: Modified Accelerated Cost Recovery System.


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This positive result over the cost recovery period for real property is due in large part to the preferential rates imposed on real property capital gains.
The taxpayer must reduce the qualifying property's adjusted basis by the bonus depreciation before computing the customary depreciation for the appropriate cost recovery period.
Commercial real estate practitioners believe that the current 15-year cost recovery period for leasehold improvements should not be permitted to expire at the end of this year.
 
 
 
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