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Depreciation Calculator - Excel

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Depreciation Calculator - Excel Powered By Docstoc
					Depreciation Calculator for 2008 Economic Stimulus Package
(Please consult your tax advisor because the assumptions made in the calculator may not apply to your situation)

Step 1

Step 2

Step 3
Cost Basis (what you paid reduced by nonbusiness use and for amount expensed under section 179). The original use of the property must begin with the taxpayer after Dec. 31, 2007. In other words, the property must be "new" property.

Step 4

RESULTS

Asset Type (Automobile, Truck, Van or Other. If your truck or van has a gross vehicle weight of more than 6,000 pounds, please Business enter Other Type instead of Truck (Farm or Non-Farm) or Van!)

Asset Life in Years (3, 5, 7, 10, 15 or 20) [see example s below]

Remaining Basis

Special "Bonus" Depreciation

First Year Regular Total First Year Depreciation1 Depreciation2

START

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1

Steps 1 through 4 MUST be completed.

The calculation of First Year Regular Depreciation uses the GDS MACRS Declining Balance (DB) method of depreciation at the maximum allowed (either 200% or 150%) depending on the Asset Life entered and Farm versus Non-Farm use. The calculator uses the half-year convention. If over 40% of the cost basis for all property (except nonresidential real property, residential rental property, and railroad grading or tunnel bore) is placed in service in the last 3 months of your business tax year, then the mid-quarter convention must be used and this calculator DOES NOT APPLY! Also, Congress may pass legislation that would retroactively require the use of straight-line depreciation for certain 15-year property including qualified leasehold improvement property and qualified restaurant property. In this case, this calculator WOULD NOT APPLY to those 15-year properties! Depreciation is calculated using a formula and rounded to nearest dollar. As a result depreciation calculations may not match exactly those based upon IRS Publication 946 MACRS Percentage Table Guide.
2

Automobilies are limited to $10,960 and Trucks and Vans are limited to $11,160. Please note that the calculator DOES NOT Apply if section 179 expensing is also taken for an Automobile, Truck or Van.

INSTRUCTIONS
Step 1: Please enter "Farm" if your business is a Farm or "Non-Farm" if not. Step 2: Please enter what type of asset - Automobile, Truck, Van or Other. If your truck or van has a gross vehicle weight of more than 6,000 pounds, please enter Other instead of Truck or Van. Step 3: Please enter the Cost Basis for the asset placed in service. This is usually what you paid for the asset reduced for nonbusiness use and for amount expensed under section 179. The original use of the property must begin with the taxpayer after Dec. 31, 2007. In other words, the property must be "new" property. Step 4: Please enter the Asset Life. Must be 3, 5, 7, 10, 15 or 20 years. Other asset lives are excluded. See below for common asset lives.

RESULTS
Special "Bonus" Depreciation is automatically calculated by taking 50% of the Cost Basis. First Year Regular Depreciation is automatically calculated. It is based upon the GDS MACRS convention applicable to the asset using the half-year convention. If over 40% of the cost basis for all property (except nonresidential real property, residential rental property, and railroad grading or tunnel bore) is placed in service in the last 3 months of your business tax year, then the mid-quarter convention must be used and this calculator DOES NOT APPLY! Total First Year Depreciation is automatically calculated by summing the Special "Bonus" Depreciation and First Year Regular Depreciation.

Examples of Assets by Asset Life
3-year property: Tractor units for over-the-road use, any race horse over 2 years old when placed in service; qualified rent-to-own property. 5-year property: Automobiles, trucks, vans, computers and peripheral equipment, office machinery such as type writers, calculators, and copiers. 7-year property: Office furniture and fixtures such as desks, files, and safes and farm fences. 10-year property: Vessels, barges, tugs, and similar water transportation equipment, any single purpose agricultural or horticultural structure. 15-year property: Certain improvements made directly to land or added to it such as depreciable shrubbery, non-farm fences, roads, sidewalks and bridges, any retail motor fuels outlet, any municipal wastewater treatment plant, initial clearing and and grading land improvements for gas utility property, certain new electric transmission property placed in service after April 11, 2005, and any new natural gas distribution line placed in service after April 11, 2005. 20-year property: Farm buildings (other than single purpose agricultural or horticultural structures), initial clearing and grading land improvements for electric utility transmission and distribution plants. For a detailed listing of Assets by Asset Life, see Appendix B of Publication 946 (pages 97 to 106). Use the GDS (MACRS) column for Asset Life. See URL below.

http://www.irs.gov/pub/irs-pdf/p946.pdf


				
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