The method used to calculate depreciation for federal income tax purposes is ?
What are your choices?
sum of the years digits method
declining balance method
units of production method
modified accelerated cost recovery system method
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To determine the method used to calculate depreciation for federal income tax purposes, you would refer to the Internal Revenue Service (IRS) guidelines. Specifically, the IRS provides guidelines on depreciation in Publication 946, titled "How to Depreciate Property." This publication outlines the rules and methods for depreciating various types of property for tax purposes.
To find the most up-to-date information on depreciation methods, you can visit the IRS website and search for Publication 946. Within this publication, you will find details on different depreciation methods, including the Modified Accelerated Cost Recovery System (MACRS). MACRS is the most commonly used depreciation method for most tangible property placed in service after 1986.
Once you have access to Publication 946, you can refer to the specific section related to your type of property or business to determine the applicable depreciation method. It is important to consult the IRS guidelines or seek professional tax advice to ensure accurate and compliant depreciation calculations for federal income tax purposes.