Depreciation for Tax Professionals: MACRS, Section 179, and Bonus Depreciation

Depreciation is a fundamental component of business and rental property tax reporting, yet errors in asset classification, recovery periods, depreciation methods, and accelerated deductions can result in incorrect tax returns.

This course provides tax professionals with a practical review of federal depreciation rules and the decision-making process used to determine the proper treatment of depreciable property. Participants will examine the Modified Accelerated Cost Recovery System (MACRS), including property classifications, recovery periods, depreciation methods, conventions, and the differences between the General Depreciation System (GDS) and Alternative Depreciation System (ADS).

The course also addresses depreciation of residential and nonresidential real property, land improvements, Qualified Improvement Property, and the distinction between §1245 and §1250 property. Participants will examine the requirements and limitations of the IRC §179 deduction and bonus depreciation, including eligible property, applicable limitations, and the interaction between accelerated depreciation provisions.

Through practical examples and calculations, participants will apply depreciation rules to common business and real estate transactions, identify common depreciation errors, and review the reporting and recordkeeping requirements associated with Form 4562.