Q:

What is appliance depreciation?

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Quick Answer

Appliance depreciation refers to the calculation that determines the loss of value of an appliance, usually on an annual basis. Depreciation can be claimed by individuals and businesses who own rental properties as a business deduction on tax returns.

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What is appliance depreciation?
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Full Answer

The IRS provides a schedule for depreciation amounts. Different appliances depreciate at different rates and over variable terms. One aspect of depreciation calculations for appliances is the date the item was placed in service. According to the IRS, depreciation doesn't begin the day of purchase but the date of installation for many appliances. A dishwasher purchased in December 2013 and installed in December 2014 cannot be claimed on 2013 tax returns, for example.

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Related Questions

  • Q:

    Is accumulated depreciation considered a liability?

    A:

    Accumulated depreciation is considered a contra asset, appearing as a negative balance underneath the asset to which it is assigned in the asset section on the balance sheet. However, accumulated depreciation cannot be considered neither  a true asset nor a true liability as it does not meet the qualifications for either category.

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  • Q:

    What is the depreciation rate for a computer?

    A:

    The full cost of a computer purchased for business purposes can be claimed over five years. It can be claimed in the first year, divided with 50 percent claimed the first year or distributed over the five-year period.

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  • Q:

    What is the formula for depreciation rate?

    A:

    There are three commonly used formulas for depreciation based on time: declining balance method, straight line method and sum-of-the-years'-digits method. The first formula calculates book value multiplied by depreciation rate; the book value equals cost minus accumulated depreciation. To calculate the depreciation rate for a double declining balance, use straight line depreciation rate multiplied by 200 percent. Likewise, for a 150 percent declining balance, use straight line depreciation rate multiplied by 150 percent.

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  • Q:

    What is depreciation in regards to accounting?

    A:

    In accounting, "depreciation" refers to the decrease in value of an asset over time. Income statements reflect this decrease in value during an accounting period as a depreciation expense.

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