Depreciation of fixed assets owned by the Company and the banking consolidated subsidiaries is computed using the declining balance method
while the straight-line method is applied to buildings (excluding facilities attached to buildings) acquired on or after April 1, 1998 and facilities attached to buildings and structures acquired on or after April 1, 2016.
Also, the accounting methods assume non-linearity, other than in linear models, for depreciation of assets, including so called degressive (with its subtypes: declining balance method
or the method of the sum of digits of years) and progressive methods.
the straight line method and declining balance method
For owned autos used more than 50% for business, taxpayers can use regular MACRS depreciation, which is the 200% declining balance method
applied to a five-year recovery period.
If this argument is FALSE or omitted, Excel will switch from the declining balance method
to a straight-line method when it becomes more beneficial to do so.
If the depreciation method of the replacement property in the year of replacement is the 150% declining balance method
and the method of the relinquished property is the 200% declining balance method
, and if neither method had been switched to the straight-line method in the year of replacement or any prior taxable year, the applicable depreciation rate for the year of replacement and subsequent taxable years is determined by using the rate of the replacement property as if that property were placed in service by the acquiring taxpayer at the time the relinquished property was placed in service by the acquiring taxpayer, until the 150% declining balance method
has been switched to the straight-line method (Treas.
For example, the cost of depreciable land improvements may be depreciated over a 15-year period using the 150-percent declining balance method
Under the corporate alternative minimum tax regime that was enacted in 1986, depreciation on property placed in service after 1986 must be computed by using the class lives prescribed by the alternative depreciation system of section 168(g) and either (1) the straight-line method in the case of property subject to the straight-line method under the regular tax, or (2) the 150-percent declining balance method
in the case of other property.
It would replace the 200% declining balance method
with a 150% declining balance method
on 3-, 5-, 7- and 10-year assets.
The Tax Reform Act of 1986 (TRA) permitted more accelerated depreciation for tax purposes by providing that, in most cases, assets can be depreciated under a 200-percent, rather than a 150-percent, declining balance method
. The resulting increase in tax-based depreciation produced the very large increase in CCAdj in the first quarter.
168(k)(1) to such property would equal $6 million (i.e., $5 million of bonus depreciation plus $1 million of MACRS depreciation on the remaining basis, using the 200% declining balance method
For personal property, MACRS typically uses a 200 percent declining balance method
for determining the annual expense.