MGMT 127A Chapter Notes - Chapter 8: Macrs, Personal Property
Document Summary
Cost recovery deductions are based on the premise that the asset acquired (or improvement made) benefits more than one accounting period. Depreciation and cost recovery are used interchangeably. Tangible assets other than natural resources are depreciated. Natural resources like oil, gas, coal, and timber are depleted. Intangible assets like copyrights and patents are amortized. Generally, no write off is allowed for an asset that does not have a determinable useful life. Property includes both realty (real property) and personalty (personal property) Personal use property is any property (realty or personalty) that is held for personal use rather than for use in a trade or business or income producing activity. Cost recovery deductions are not allowed for personal use assets. Assets used in a trade or business or for the production of income are eligible for cost recovery if they are subject to wear and tear, decay or decline from natural causes, or obsolescence.
