Describe the purpose of depreciation deductions

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Assignment: Depreciation and Nontaxable Property

Companies buy, use, and sell many types of property as a part of business operations. The amount involved can be substantial as can be the tax implications.

Based on your readings for the module, respond to the following:

• Describe the purpose of depreciation (or cost recovery) deductions. Give an example of how it benefits a company.

• Describe the requirements to qualify for a nontaxable exchange of property.

• When might it be in the best interest of a company not to qualify for a nontaxable exchange treatment? Give an example to explain your answer.

Write your initial response in three to four paragraphs.

Reference no: EM131559097

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