25 | | | Tabular value, year 2. |
Deduction in second year.
20 | | | Tabular value, year 3. | |
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When the acquisition date of an asset does not coincide with the start of the tax or fiscal year, then the amounts of depreciation in the first and last years are computed as fractions of a full year’s depreciation. Except in SL, the intermediate years are computed as sums of fractions. This does not apply to the ACRS method.
Suppose you acquired an asset in October and wanted to depreciate it for 3 years. (Your fiscal year begins January 1st.) The depreciation schedule would affect parts of 4 years, as shown in the illustration. The 3 months from October to December equal ¼ year.
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For SL depreciation,
For DB and SOYD depreciation, each year’s depreciation value is different, as shown in the table:
9: Depreciation 119
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