Assignment : Depreciation and Nontaxable Property
Companies buy, use, and sell many types of property as a part of business operations. The amount involved can be substantial as can be the tax implications.
Respond to the following:
Describe the purpose of depreciation (or cost recovery) deductions. Give an example of how it benefits a company.
Describe the requirements to qualify for a nontaxable exchange of property.
When might it be in the best interest of a company not to qualify for a nontaxable exchange treatment? Give an example to explain your answer.