Thank you so much, I've been struggling so much to learn this MACRS Depreciation. After watching your video I feel much better, the way you broke it down it was so simple and amazing. I want to become a CPA, I went last semester to college but I haven't been able to submit my last two assignments, because I couldn't understand. I hope I will complete them today. Thank's a big bunch!
This is so incredibly helpful! I'm taking a business taxation class and its literally just read the chapter, use the publication, and submit answers to questions. No lectures, no practice, nothing. I feel like I'm trying to learn physics in a foreign language when I read the book. This is such a good breakdown and makes so more sense.
I found this to be quite refreshing! I was having a difficult time understanding this chapter in my tax class. Thank you for explaining it in this manner. I suffered through the ads in hopes that I could return the favor.
Absolutely awesome video!! Both the videos are super simple and easy to understand. The revelation of the example from the publication has really the nail the video to the top of my playlist. Like to see some more video like sale of fixed assets. thanks you so much..
Thank you for this video. I just purchased half of a duplex for our son to live in (cheaper than renting) and have started the process of learning how to record rental income / expenses. Do you have any Excel examples of Rental Depreciation using MACRS? If not, I'll try and program one using the 946 Publication...............Great teaching voice and manner
Do you have to manually create a depreciation calculation table for every asset you want to depreciate? Reason I ask is because I have over 30+ assets approximately that will have to be depreciated so you can see how long it would take to manually do it for all of them.
Greeting, this was an amazing explanation and will help with what the file on business taxes. My question is can you share the formulas so that I can take what I've learned and make a spreadsheet similar to yours.
The 1st year you are only getting the last six months to depreciate. Remember, you are using the HY convention, which means that the IRS always considers the assets placed on July 1st (July - Dec is 6months.) You get the other six months on the back side which would carry into the 6th year. To make it a full 5 years - * year 1 is 1/2 year, year 2 is a full year, year 3 is a full year, year four is a full year, year 5 is a full year - this adds up to 4.5 years. This means you still have to add 6 more months which will carry you through year 6.
Thank you so much for explaining in detail.Just one thing though why didn't we take 150DB instead of 200DB.It's not optional, is it? Also could you please put out some videos specific to 1120 1065 return, specially Form 4797? Thanks again for your videos.
Under SL method, if we're taking 100 as Dep in the 1st year, why will our beginning basis of year 2 be 800? Shouldn't it be 1000 - 100 = 900? And apparently, SL Dep for year 2 will be 900*(1/4.5) = 200
Yes, we do help clients with personal taxes. Please feel free to schedule a free 15-minute phone consultation here: calendly.com/efrosfinancial/free-15-minute-phone-consultation?month=2023-10. You may learn more about our bookkeeping/tax services here: www.efrosfinancial.com/bookkeeping2/.
I don't know why we are calculating straight line depreciation on Basis calculated as per MACRS. The adjusted basis for both the methods should be different.
I was confused by that too. For the straight line depreciation shouldn't it just be a constant $200 of depreciation per year for 5 years? It shouldn't be a different amount every year.
The useful life of an asset for income tax purposes is separate from the actual age of the asset. Accordingly, to reference your example, if you place in service for business purposes a 9-year old laptop (you may want to invest in a new laptop! :D), then you would begin depreciating that laptop over 5 years -- not 7 years. However, given that the basis amount used to depreciate assets which are converted from personal use to business use is generally the lower of the adjusted basis or the fair market value on the date the asset is placed in service, you would also need to determine the fair market value of the laptop which may be close to zero after 9 years. As a result, the lack of fair market value would decrease the total tax benefit of the depreciation which would result.
A business can write off depreciation of property on their taxes. So its calculating how much depreciation a business can write off on their taxes for certain properties.
You have a talent to explain in a way for non-finance people to understand. thank you!
You did an amazing job explaining it in such detail. Thank you!!
God bless you for teaching this to us! We are so grateful!!!
Awesome video! Thank you. I couldn't understand this in my tax class you made so much easier.
Glad it helped!
You're a lifesaver, thank you so much!
Thank you so much, I've been struggling so much to learn this MACRS Depreciation. After watching your video I feel much better, the way you broke it down it was so simple and amazing. I want to become a CPA, I went last semester to college but I haven't been able to submit my last two assignments, because I couldn't understand. I hope I will complete them today. Thank's a big bunch!
You're very welcome!
Thanks so much! Your spreadsheet and calcs have made MACRS depreciation easy for someone who DOES NOT like tax accounting!
This is so incredibly helpful! I'm taking a business taxation class and its literally just read the chapter, use the publication, and submit answers to questions. No lectures, no practice, nothing. I feel like I'm trying to learn physics in a foreign language when I read the book. This is such a good breakdown and makes so more sense.
Thank you, I am a CPA and you broke this down wonderfully.
Keep up the good work.
Thank you for watching and for the feedback, Robert! :D
Incredibly helpful!! Thanks so much!
Thank you -- you're welcome! :D
Well done. Very clearly explained. Thanks for that.
Glad it was helpful!
I found this to be quite refreshing! I was having a difficult time understanding this chapter in my tax class. Thank you for explaining it in this manner. I suffered through the ads in hopes that I could return the favor.
Hello Sabrina -- thank you for watching (including the ads) and for your kind words! I hope that the information was helpful! :D
This helped me tremendously thank you
Thank you, you're welcome! :D
Absolutely awesome video!! Both the videos are super simple and easy to understand. The revelation of the example from the publication has really the nail the video to the top of my playlist. Like to see some more video like sale of fixed assets. thanks you so much..
Great explanation!!!
Great video!
Thank you for these videos. I've had difficulty understanding this topic. I finally got it :)
Thank you for your feedback -- glad it was helpful!
Great video
Alex, Good job. Thanx.
Thx, but why did you not cover section 179? Sooooo much simpler for us content creators.
You are great!, thank you!, I will follow you, very clear and easy to understand!
Thank you for watching and for your feedback, Jennifer! :D
Thank you for this video. I just purchased half of a duplex for our son to live in (cheaper than renting) and have started the process of learning how to record rental income / expenses. Do you have any Excel examples of Rental Depreciation using MACRS? If not, I'll try and program one using the 946 Publication...............Great teaching voice and manner
If I have a mid-quarter convention in year 1 on an item, what convention do I have in year 2, for the same asset?
Do you have to manually create a depreciation calculation table for every asset you want to depreciate? Reason I ask is because I have over 30+ assets approximately that will have to be depreciated so you can see how long it would take to manually do it for all of them.
Greeting, this was an amazing explanation and will help with what the file on business taxes. My question is can you share the formulas so that I can take what I've learned and make a spreadsheet similar to yours.
Great video. Q - if its a 5 year recovery period, why does the depreciation go to 6 years in the depreciation table?
The 1st year you are only getting the last six months to depreciate. Remember, you are using the HY convention, which means that the IRS always considers the assets placed on July 1st (July - Dec is 6months.) You get the other six months on the back side which would carry into the 6th year. To make it a full 5 years - * year 1 is 1/2 year, year 2 is a full year, year 3 is a full year, year four is a full year, year 5 is a full year - this adds up to 4.5 years. This means you still have to add 6 more months which will carry you through year 6.
Thank you so much for explaining in detail.Just one thing though why didn't we take 150DB instead of 200DB.It's not optional, is it? Also could you please put out some videos specific to 1120 1065 return, specially Form 4797?
Thanks again for your videos.
Under SL method, if we're taking 100 as Dep in the 1st year, why will our beginning basis of year 2 be 800? Shouldn't it be 1000 - 100 = 900? And apparently, SL Dep for year 2 will be 900*(1/4.5) = 200
Great video. Can you do a video for rental? Pls & TY
Hi Alexander. Do you do personal taxes ?
Yes, we do help clients with personal taxes. Please feel free to schedule a free 15-minute phone consultation here: calendly.com/efrosfinancial/free-15-minute-phone-consultation?month=2023-10. You may learn more about our bookkeeping/tax services here: www.efrosfinancial.com/bookkeeping2/.
What if the equipment only lasted 2.5 yrs?
Hello, would you say that a Mahindra front loader for my farm is An equipment under 5 years? Thx
I don't know why we are calculating straight line depreciation on Basis calculated as per MACRS. The adjusted basis for both the methods should be different.
I was confused by that too. For the straight line depreciation shouldn't it just be a constant $200 of depreciation per year for 5 years? It shouldn't be a different amount every year.
yep, very awesome!
Thank you! Cheers!
Hi: My question for you is I have a laptop that is 9 years old.. clearly exceeding the 5 year life. Does this mean that I go into the 7 year life now?
The useful life of an asset for income tax purposes is separate from the actual age of the asset.
Accordingly, to reference your example, if you place in service for business purposes a 9-year old laptop (you may want to invest in a new laptop! :D), then you would begin depreciating that laptop over 5 years -- not 7 years. However, given that the basis amount used to depreciate assets which are converted from personal use to business use is generally the lower of the adjusted basis or the fair market value on the date the asset is placed in service, you would also need to determine the fair market value of the laptop which may be close to zero after 9 years. As a result, the lack of fair market value would decrease the total tax benefit of the depreciation which would result.
Dope👍
Im so confused what does this have to do with taxes
A business can write off depreciation of property on their taxes. So its calculating how much depreciation a business can write off on their taxes for certain properties.
😘😘😘