Sec+167+Depreciation

[Depreciation] Depreciation is treated as an annual operating expense; thus allowed as a deduction each year for the total deprecation. – it is a cost spreading device over a period.

Prerequisite for deduction: §167(a) and §168(a) restrict the depreciation deduction to either: 1) Property used in a trade or business or 2) property held for the production of income.

Sec 168 Accelerated Cost Recovery System 1) Depreciation Method 2) Recovery Period 3) Applicable Convention