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Old 02-06-2008, 10:36 AM
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How can a business depreciate used furniture and equipment?

I bought used furniture and equipment that is over $7,500 for my new business that I started in 2008.

I was wondering how I would have to go about depreciating these assets, by reading your threads I understand that I cannot take S179 Election, so what are the alternatives?

Thanks a lot...



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Old 02-07-2008, 04:39 PM
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How can a business depreciate used furniture and equipment?

It appears that you have purchased used furniture and equipment for use in your business. According to the IRS tax code, since the assets placed in service are not NEW, you cannot take a "Section 179 Election", which would have allowed you in this case to write-off as expense the entire $7,500.

However, you can still depreciate both the Office furniture and equipment according to a method known as "Modified Accelerated Cost Recovery System (MACRS)." The depreciation calculation is a complex calculation, suffice to say it is best handled by the tax program.

The MACRS method of depreciation is an alternative to the straight line method of depreciation that is also available to the taxpayers. But, the MACRS method generally allow a faster depreciation amounts in the initial years of placing the asset in service and towards the last 2 years the depreciation will be considerably less.

For a detailed review of the depreciation methods you may consult the IRS publication 946.

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