Upon completing this chapter, you should be able to:
LO 9-1
Explain the concept of basis and adjusted basis and describe
the cost recovery methods used under the tax law to recover
the cost of personal property, real property, intangible assets,
and natural resources.
LO 9-2
Determine the applicable cost recovery (depreciation) life,
method, and convention for tangible personal and real property
and calculate the deduction allowable under basic MACRS.
LO 9-3
Explain the additional special cost recovery rules (§179, bonus, listed property) and calculate the deduction allowable under
these rules.
LO 9-4
Explain the rationale behind amortization, describe the four
categories of amortizable intangible assets, and calculate
amortization expense.
LO 9-5
Explain cost recovery of natural resources and the allowable
depletion methods.
