How to depreciate an x-ray machine?

Question

Whats the acceptable appreciation schedule for an $10,000 x-ray machine? 5 years? 7 years? longer?
Also, at the end of the depreciation (7 years for example) and the unit still works, what value does it have? Zero? $5,000? At the end is it subject to personal property taxes?

Depreciate*** not appreciate (duh)

An x-ray amchine may "operate" for upwards of 20 years depending on use...but the ability to sell a 20 year old machine for any $ is virtually impossible, as the repair costs are high. After 5 years a repair may make the unit worth virtualy nothing. But if it works what taxable value would it have?

Answer 1

You can depreciate a $10,000 piece of equipment over 5 years with no problem at all as a business expense.

You don't determine the "time" by how long the property lasts. The machine may last 15 years, but if you depreciate it over 5 years, then after that 5 years you obviously don't get any further deduction for it.

You stop depreciating property when you have fully recovered your cost or other basis. You recover your basis when your section 179 and allowed or allowable depreciation deductions equal your cost or investment in the property.

I am not aware of personal property taxes on equipment. That would be a local tax, not an IRS concern.

Answer 2

I would say 5 years.

Business personal property will always be subject to personal property taxes. Even if it is on your books for $0.00, the county (or other taxing authority) would say it had some value for tax purposes. When you file the return, you file it at original cost. Some places ask for the book value but it may not have any bearing on the assessed value. Many states have a minimum percentage that property can never drop below.

Answer 3

Depreciable Life:

When is the last time you replaced an x-ray machine? How long had it been in service at the time you replaced it?

Salvage Value:

When you replaced that x-ray machine, did you just trash it? If so, its salvage value is zero. Or were you able to sell it used? If so, its salvage value might be that amount if you expect to be able to do so again.

Personal Property Taxes:

Possibly yes, although tax code often allows certain depreciation methods that reduce the amount of tax owed (e.g., MACRS).