Salvage value

[indyscott]

I remember a long time ago, when I was studying for the CPA exam, all the depreciation problems had "salvage value" in them. How come none of our asset entry sheets have any place to put salvage value as an adjustment to the depreciable basis?

[Gail in Virginia]

Maybe its because we live in a throw-away society! :P

[TaxmannEA]

It's because MACRS depreciation does not use a salvage value. Assets are fully depreciated for tax purposes. . That's just the way the code sets it up. I suppose congress wanted to stimulate business by allowing more deprciation deduction in this way.

[jainen]

>>none of our asset entry sheets have any place to put salvage value<<

If you take Standard Mileage Allowance in the first year, you can switch to actual expenses later. But you have elected out of MACRS so you must use those old methods. In my opinion that requires a salvage value; not everyone agrees with me.