to what extend can provision for depreciation be considered a source of funds?
343406
Depreciation is a non-cash expense used to match asset utilization the the revenues those assets help generate.  The depreciation expense in and of itself does not contribute to cash, but the tax shield you get from having depreciation does create a source of funds.  For financial accounting, you have straight line, double declining balance, sum of years, etc...take the depreciation expense in any given year and multiply it by the tax rate in that year to get your depreciation tax shield (that is the amount of taxes you did not have to pay due to depreciation being there).  When you put your cash flow statement together, depreciation and all non-cash items are added back to net income in the Operating Cash Flow section.\n\nFor tax accounting, you have an accelerated method called MACRS.  Taking the depreciation percent from the MACRS table, multiplying the asset's book value by that percent yields your tax-based depreciation.  Multiplying this number by your tax rate will give you actual cash savings on your tax returns.  \n\nImportant to note that tax savings for financial statements and tax returns may be different.  Remember, the tax return data shows ACTUAL cash, so that will be the number you are most interested in.  The discrepency between financial statements and tax returns will be made up in deferred tax assets and liabilities on the balance sheet.
777479
Depriciation is what the government allows a business to deduct from one's income taxes.   It is like for usage or wear and tear.   A building can be depriciated over 20 years.   Example; it cost $100,000 to purchase the bldg, over 20 years you can take 1/20 each year off your or the companys taxes ie $5,000.   There are other depriciation factors that can be used.   This is called straight line and is a simple way to explain it.   To answer your question, it would appear that one of two things have happen.   A number of expenditures were purchased over the year and therefore, would "increase the amount of depriciation" or depriciation rates have been changed, which is not a good thing to do.
945726
Yeah unless the money Is delt under the table. Youll have to pay a tax on it, the ammount really depends on how much youll be reiciving
704165
Yes it can. For example products that require a large expense to dispose of can have a negative marginal utility if the gain from that extra product is less that the cost to dispose of it.
171158
Long life assets, as opposed to short life consumables are often treated as capital equipment by a company and tax deductions for depreciation may be allowed over the life of the asset.  Check with a tax advisor.  Of course to obtain full life of the asset it may be necessary to set up an effective preventative maintenance program based on the vendor's technical recommendations, often contained in the equipment's technical manual.
790336
Really complex area - some boffins spend all their lives looking into this.\n\nThe abbreviated answer is:\n* Yes, definitely if the property is less than three years old\n* Maybe if the property is more than three years old\n\nTechnically if a property is more than three years old it is exempt from VAT but the seller can waive this exemption (known as 'opting to tax') if they wish.  This will mean 17.5% VAT is charged on the sale (which the seller doesn't get to keep).  The reason the seller might do this is becuase if they sell a building and charge VAT they're allowed to reclaim VAT on any related costs (such as legal fees).\n\nOnce a building is 'opted' you can't change that status even if it changes hands. Therefore the next time its sold on VAT would have to be charged on the sale.\n\nThese rules only apply to commercial property - not residential.\n\nTrust me - get an accountant/tax adviser to assist - really complex area.
170964
20 years ago I had a Keogh that was drafted by my attorney that included provisions for borrowing a limited amount of money from the plan for a real estate investment. I don't know if the laws still allow for that. I do know that there are trustees that have flexible plans that let you do straight real estate investment.\n\ncheck this website.\nhttp://www.ekeogh.com/prohibited_transactions.html
633721
If the partnership has stopped operating, then the depreciation should have stopped on the date the partnership ceased operations as well.  The up side to this is that your capital gain will be less when the business property is disposed.  Consult your tax advisor for more details.
31800
Depreciation is added into every cash flow statement that I have ever seen where a company has fixed depreciable assets. Since it reduces net income but does not currently rely on the use of cash, you add it back. The purchase of the asset would be handled seperately as a use of cash. If you have a depreciation expense you should have an accumulated depreciation amount on your balance sheet. That sounds like your problem.\n\nEquipment $10,000.00\naccum depr. 1,000.00\nnet asset $ 9,000.00\n\nIf your first years depreciation was $1,000.00 then that would be on the income statement as an expense and on the cash flow as an add back to cash flow. You would also have an equipment purchase of $10,000.00 reducing your cash flow.
371480
Yes.  You can deduct any investment-related expenses against the investment income you generate.  Use Schedule A.
981561
Yes.  The tax impact of the onoing depreciation of an asset (the portion 'written off' or expensed each year) is part of the cash flow.  Usually the annual asset depreciation produces a tax credit and thus adds to the effective annual cash flow.  Depreciation also comes into play if the asset is sold (disposed of) during the analysis period: the difference between its depreciated (book) value and fair market value at the time of sale will produce a taxable gain or loss whose tax effect will also have to be included in the cash flow.
812345
I'm just going off the top of my head here without looking anything up, so just use my answer as a guide and not fact.  (Because staring at the code is factual, but sometimes doesn't get you very far in thought.)\n\nThe rental property.  Chop this up into three components - land, building and personal property.\n\nLand, as you know, is not depreciable.  But it should be listed as a separate component of the sale.  \nThe building is depreciable, but will also be under an additional code section, 1250.\n\nThe general rule starts with section 1231 property.  Then, depending on what it is, it might ALSO be 1245 property or 1250 property.  But just to keep things simple, think 1245 = equipment and 1250=buildings.\n\nBoth 1245 and 1250 pretty much say this: When you sell the asset, the amount over adjusted basis, up to the extent of depreciation taken, is ordinary gain.\n\nFor example.  I bought a piece of equipment a few years back for 10,000.  Tuesday, when I sold it, it had a tax adjusted basis of 1,000 (10,000 historical value less 9,000 of accumulated tax depreciation taken).  I collected 5,000.  In this case, ALL of my 4,000 gain (5,000 sales price less 1,000 adjusted basis) will be ordinary income.  \nLet's say I sold it for 12,000.  9,000 of my gain would be ordinary and 3,000 capital gains.  \nNow I'm babbling.  But in a nutshell, you are recapturing the depreciation expense at ordinary, just like you took the expense (over time).\n1250 for buildings has something similar, but not many have that issue anymore (unless they were purchased over a decade ago or so).  There is some special additional tax on the gain or special rate.\nBut the losses are ordinary, thankfully.\nAnd I feel like I'm getting off track here, but I'm trying.  :)\n\nBut onto the land.  It depends.  And perhaps this is where saying more info is needed might help.\nIf this is a separate piece of land accounted for seperately and Mary can prove that she wasn't going to improve anything, then there might be support for the claim that it is a capital asset and the gains are capital.\nHowever, that would be really agressive to me considering it saysing "holding for future development" and if there has been anything substantial done to the property.\nIn short, you will want to check out code section 1237 for reference too although it doesn't exactly fit your problem.\n\nAnd last but not least, I'll clog this answer with an Explanation nabbed from my own stuff.  Good luck on your research and forgive me for such a lengthy answer.  Usually I hate stuffed answers.  Cheers!\n\nReal property produces capital gain or loss on its sale or exchange if it's a capital asset. The main reasons for the exclusion of real property from the capital asset category are (1) that it's property held by the taxpayer primarily for sale to customers in the ordinary course of his business, and (2) that it's real property used in his business. Code Sec. 1221(a)(1) , Code Sec. 1221(a)(2) . However, the sale or exchange of real property used in a business (including rental realty), or the involuntary conversion of such property or real property that is a capital asset, can produce a Code Sec. 1231 gain or loss. \n\nThe fact that real property is held primarily for sale to customers in the ordinary course of a taxpayer's business precludes it from being either a capital asset or a Code Sec. 1231 asset (business-use property). Code Sec. 1221(a)(1) ; Code Sec. 1231(b)(1)(B) . The factual question of whether real property was so held gave rise to intensive litigation. Cases decided under Code Sec. 1231 are covered as part of the question of what property is used in a business. Decisions delineating property that is a capital asset are covered in this subdivision. The special rules of Code Sec. 1237 , allow taxpayers other than C corporations to obtain limited capital gain as to property subdivided for sale under certain circumstance
26432
Section 179 of the Internal Revenue Code now allows taxpayers to deduct certain capital assets such as computer costs along with software (up to $24,000 in 2004). This comes about the fast paced world of techology where technology related assets used in the business usually are outdated within one year. Thus, you can under these circumstances deduct the entire amount within the current tax period against your business income. Also, you can qualify for this deduction even if you purchase the computer on credit. If you provide more details about this question, the answer can be expanded.\n\nHope this helps.
1092791
I would think so.  Unless it is devalued as part of a financial reorganization it should continually increase in value.
1105322
Car payments, no, assuming you own the car.\nHowever, you can deduct a proportionate amount of the interest on the note (or lease payment if car is leased), maintenance, repairs, gas, insurance, taxes etc.  The ratio will be your business miles divided by total mileage for the year.  If you have not (or do not) save your receipts, you can elect to use the standard mileage rate (changes each year) and apply that to your business mileage.  However, if you choose to use the actual expense method, you have to use that method as long as you have the car or are in that business.  You will have other issues as well if your business usage is over 50%.  I personally suggest people use the mileage rate since the record-keeping is easier and, unless you are driving a luxury auto, the deduction is typically higher.
312079
The entire amount of depreciation is recaptured at time of sale.  Recaptured depreciation is taxed at a 25% rate...\n\nAlthough, you can do a 1031 exchange to defer the capital gains taxes.\n\nHere's my website, and a capital gains calc.\nhttp://www.nnnstore.com/1031_capital_gains_calculator.php\n\nI'll be releasing the site shortly as:\nhttp://www.1031store.com
208162
The concept of depreciation is really pretty simple. For example, let’s say you purchase a truck for your business. The truck loses value the minute you drive it out of the dealership. The truck is considered an operational asset in running your business. Each year that you own the truck, it loses some value, until the truck finally stops running and has no value to the business. Measuring the loss in value of an asset is known as depreciation.\nDepreciation is considered an expense and is listed in an income statement under expenses. In addition to vehicles that may be used in your business, you can depreciate office furniture, office equipment, any buildings you own, and machinery you use to manufacture products.\n\nLand is not considered an expense, nor can it be depreciated. Land does not wear out like vehicles or equipment.\n\nTo find the annual depreciation cost for your assets, you need to know the initial cost of the assets. You also need to determine how many years you think the assets will retain some value for your business. In the case of the truck, it may only have a useful life of ten years before it wears out and loses all value