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depreciation and nontaxable property

Assignment 1: 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.

Based on your readings for the module, 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.

Write your initial response in three to four paragraphs.

By Saturday, September 20, 2014 submit your response to the appropriate Discussion Area. Use the same Discussion Area to comment on your classmates’ submissions and continue the discussion until Wednesday, September 24, 2014. Comment on how your classmates would address differing views.

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