IS: Depreciation Deduction

General Description:

The Individual Series of classes is designed for tax return preparers and new tax professionals. Participants will learn the underlying authority for, and possible complexity of, seemingly simple tax questions, and how that authority ties into tax software programs and preparation of the tax return for an individual. This course will address the depreciation deduction, including computation of the annual deduction, taxpayer elections, effect on basis, and recapture. In addition, participants will learn how to compute the depreciation deduction where the property is received in deferred or related-party transactions, as well as special provisions and limitations on certain categories of property. Updated to include the relevant provisions of the One Big Beautiful Bill Act signed into law on July 4, 2025, and subsequent guidance.

Learning Objective:

After completing this course the participant will be able to:

• Explain the purpose of and how to compute the depreciation deduction, as well as how to determine the depreciable basis in the property and the appropriate recovery period.
• Identify property subject to amortization and property excluded from depreciation.
• Apply the MACRS computation.
• Define residential rental property under §168(e)(2)(A) and explain why most vacation home and Airbnb properties have a recovery period of 39 years and not 27.5 years.
• Identify property subject to the Alternative Depreciation System (ADS).
• Compute the §179 deduction, limitations, and recapture amounts.
• Illustrate the difference between the §179 deduction and bonus depreciation.
• Identify qualified leasehold improvement, restaurant, and retail improvement property and compute the depreciation deduction.
• Compute and apply the depreciation limitations on automobiles and personal residences.
• Advise clients on transfers and dispositions of depreciable assets, including the recapture of depreciation and recharacterization under §§1231, 1239, 1245, and 1254.
• Advise clients on what to do if too much or too little depreciation has been taken.
• Identiy property which qualifies as qualified production property under §168(n).

Instructors:

Mark A. Vogel is a retired professor and director of the University of Denver Graduate Tax Program, where for 38 years he taught courses in individual, fiduciary, tax accounting, partnership, and corporate taxation. He is the author of Divorce Taxation Guide (John Wiley & Sons) and Individual Taxation (Shepards/McGraw-Hill). He received a J.D. and LL.M. in Taxation from the University of Denver College of Law and an undergraduate accounting degree from the University of Notre Dame. He is also a CPA licensed in Illinois.

This seminar is also scheduled for: