Depreciation may be deducted???

Question

a twice a year
b at the same rate every year
c using a formula
d b and c

Answer 1

I think this question is mixing up two different concepts... Depreciation is only deducted once a year when you file your tax return.

Different depreciation methods are used to calculate depreciation expense over the life of your business/rental assets. For tax purposes, you will most likely use MACRS depreciation. For book purposes, you can use straight line, double-declining balance, or sum-of-the-years digits.

So you would use a formula to calculate depreciation over an asset's useful life, and then you would deduct the total depreciation for the year on the tax return.

In response to the last answer, you don't depreciate patents or copyrights. Those are intangible assets, which are amortized, not depreciated.

Answer 2

C.

Deductions (for tax purposes) are calculated once a year so 'A' is wrong.

There are a number of ways of calculating depreciation, not all of which use the same rate every year so 'B' is wrong.

Since 'B' is wrong, 'D' must be wrong as well.

Answer 3

D

Straight line depreciation deducts the same amount each year (ex.: patents and copyrights). Declining balance methods use a formula.

Answer 4

Depends on what's depreciating .....
if it's items you use as part of your busines - then it's calculated annually - with your Tax Return - if your read the booklet that comes with the return it explains how to calculate the depreciation and how much you can offset against your tax.
If it's a property .. then it's calculated when the property is sold (although generally property appreciates)