cost recovery

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cost recovery

A tax concept commonly called depreciation,but technically different in ways that don't matter to most taxpayers.The explanation is that depreciation is a calculation determined by starting with the acquisition cost of a property and then subtracting the anticipated salvage value when the property's useful life is over.That number is then divided by the number of years one can reasonably assume the property will have a useful life.The resulting figure is the annual depreciation for the property.Because of constant arguments,audits,and litigation over the correct salvage value and the correct useful life for various properties,the IRS replaced the whole depreciation system with the cost recovery system that assigns a useful life to various classes of property,assumes the property will be worthless at the end,and then allows deductions over the course of the useful life.

The Complete Real Estate Encyclopedia by Denise L. Evans, JD & O. William Evans, JD. Copyright © 2007 by The McGraw-Hill Companies, Inc.

Cost Recovery

A term sometimes used to refer to depreciation claimed under the ACRS or MACRS methods of depreciation. See also Accelerated Cost Recovery System (ACRS) and Modified Accelerated Cost Recovery System (MACRS).
Copyright © 2008 H&R Block. All Rights Reserved. Reproduced with permission from H&R Block Glossary
References in periodicals archive ?
In the end, cost recovery in South Africa has undermined even its own economic rationale, with the cholera outbreak in KwaZulu-Natal, for example, costing the state dozens of times more in medical bills and emergency water supplies than it would have cost to provide water for free.
However, to discourage leasing as a means of circumventing the cost recovery limitations the lessee must report as gross income an "inclusion amount" each year of the lease in the case of an auto with a fair market value in excess of $12,800 (for lease terms beginning in 1990).(2)
This goes back to the point that the longer the cost recovery period, the less valuable any tax write-off becomes.
Cost recovery of depreciable real property basis would be under the straight-line method.
It has been 20 years since capital cost recovery rules have been updated, even though much of the high-tech equipment--such as computers, software, and advanced technology manufacturing equipment--is outdated almost as quickly as it is installed.
The scenarios help the property manager realize that the same energy upgrade can yield dramatically different financial results, depending upon whether potentials for tenant cost recovery, future rent increases, and/or lower vacancy are considered in the cost/benefit analysis.
For example, priced services are subject to the inherent discipline of the marketplace, as the Federal Reserve must control costs in order to meet the statutory directives for cost recovery in the Monetary Control Act.
As discussed above, where the property subject to a split purchase is depreciable, all depreciation or cost recovery is generally claimed by the holder of the term interest under Section 167(h).
Officials expressed hope that the city solicitor, and perhaps a representative from Cost Recovery Corp.
"Mayor Giuliani and Esther Montanez shared mutual respect and friendship for decades," said Celebration of Life founder, Dario Gristina, chairman and CEO of Genergy, a company specializing in energy monitoring, management, cost recovery and data distribution.
The taxation directorate general, in cooperation with the government financial watchdog BPKP and upstream oil and gas regulatory body BP Migas agree to form a joint team to set a new formula for cost recovery to be paid for oil production sharing contractors.