Net actuarial gain or loss is amortized using the straight line method or declining-balance method
over 10 years commencing from the next fiscal year of occurrence.
This category is depreciated over a 1S-year recovery period on the 150-percent declining-balance method
. A significant benefit can be derived from this category as well.
: Calculating depreciation expense by multiplying the book value of an asset times a multiple of the straight-line rate.
Turnbull notes that in two years, when the law conforms the recovery periods used for AMT purposes with those used for regular tax purposes, the decision whether to elect the 150% declining-balance method
for new assets will be important because it will mean having to deal with only one depreciation schedule.
Taxpayers should also be aware that this is a straight-line method, unlike other modified accelerated cost recovery system 15-year recovery property, which is generally eligible for the 150% declining-balance method
For regular AMT purposes, depreciation will be calculated using the 120% declining-balance method
over regular tax useful life.
Depreciation calculation uses the declining-balance method
. Capital gains and losses from passive K-is are treated as nonpassive for MAGI calculations.
Second, the method used to calculate reclassified assets was changed from straightline depreciation to the declining-balance method
. In effect, the Service argued that Brookshire deviated "from a consistently established method" that was not immaterial, a correction of an error or a change in useful life.
Under the current modified accelerated cost recovery system (MACRS), assets in the three-year, five-year, seven-year and 10-year classes are depreciated using the 200% declining-balance method
. Assets in the 15-year and 20-year classes use the 150% declining-balance method
31, 1993.(13) For these assets, the 150% declining-balance method
allowable for AMT is allowed for ACE depreciation.
The applicable depreciation rate is either the 2.00% declining-balance method
the 150% declining-balance method
, or the straight-line method generally depending on the class life of the property.