Depreciation, Cost Recovery, Amortization, and Depletion
⦁ LO.1State the rationale for allowing the cost recovery of an asset.
⦁ LO.2Determine the amount of cost recovery under the Modified Accelerated Cost Recovery System (MACRS).
⦁ LO.3Recognize when and how to make the § 179 expensing election, use additional first-year depreciation, and calculate the amount of these deductions as part of the MACRS calculation.
⦁ LO.4Identify listed property and apply the deduction limitations on listed property and on luxury automobiles.
⦁ LO.5Determine when and how to use the alternative depreciation system (ADS).
⦁ LO.6Report cost recovery deductions appropriately.
⦁ LO.7Identify intangible assets that are eligible for amortization and calculate the amount of the deduction.
⦁ LO.8Determine the amount of depletion expense, including being able to apply the alternative tax treatments for intangible drilling and development costs.
⦁ LO.9Identify tax planning opportunities for cost recovery, amortization, and depletion.