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If you purchase depreciable property in your business, depreciating the property isnt optionalits required. But bonus depreciation isnt mandatory. If you purchase property that qualifies for bonus depreciation, and for whatever reason dont want to write off 100% of the cost, you can elect not to take it.
Amortization and depreciation are non-cash expenses on a companys income statement. Depreciation represents the cost of capital assets on the balance sheet being used over time, and amortization is the similar cost of using intangible assets like goodwill over time.
Amortization and depreciation are two methods of calculating the value for business assets over time. Amortization is the practice of spreading an intangible assets cost over that assets useful life. Depreciation is the expensing a fixed asset as it is used to reflect its anticipated deterioration.
Amortization is similar to the straight line method of depreciation in that an annual deduction is allowed to recover certain costs over a fixed time period. You can amortize such items as the costs of starting a business, goodwill, and certain other intangibles.
This is reflected on the Form 4562 where a Sec. 754 adjustment is listed in the same fashion as any other purchased (depreciable) asset.
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Use Form 4562 to: Claim your deduction for depreciation and amortization. Make the election under section 179 to expense certain property. Provide information on the business/investment use of automobiles and other listed property.
Key takeaways: Depreciation and amortization are ways to calculate asset value over a period of time. Depreciation is the amount of asset value lost over time. Amortization is a method for decreasing an asset cost over a period of time.

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