What is a depreciating asset?


Quick Answer

Depreciating, or depreciable, assets include most types of tangible property, such as machinery, buildings, furniture, vehicles and equipment, as well as certain types of intangible property such as copyrights, patents and computer software. Depreciation is an income tax deduction allowing the taxpayer to recover a portion of the property's cost.

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Full Answer

For a depreciation deduction to be allowed, all of the following must be met: the taxpayer owns the property and uses it in a business or income-producing activity and the property has a determinable useful life of more than one year. Depreciation starts when the taxpayer places the property in service. It ends when either the taxpayer retires it from service or the property's cost has been fully recovered.

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