ACCT 3200 Lecture Notes - Lecture 4: Adjusted Basis, Macrs, Cost Basis
Document Summary
Adjusted basis: basis + additions or improvements cost recovery. All property that"s tangible is either real property or personal property. Anything that isn"t a land or building is personal property. Personal property also includes: furniture, computer, car, boat (all tangibles) Personal use property: real property or personal property. A house that you live in is real property and also personal use property. Allowed/allowable concept: the government tells us if we are allowed to claim depreciation and we don"t, the government is going to treat it as you are anyways. asset and can claim depreciation; adjusted basis is . If you do not claim the adjusted basis the government will change it to . When you sell the asset for 9000, your gain is now . You would rather not claim it and have a gain of so we pay less tax. Tangible assets that are subject to wear and tear and have a determinable useful life.
