Which property is subject to depreciation? Business inventory. A computer used exclusively for business purposes. A...

Which property is subject to depreciation? Business inventory. A computer used exclusively for business purposes. A lawn tractor used only to mow taxpayers lawn. A new oven in the taxpayers home.the oven is used only for personal use

Expert Solution

The question asks about which asset qualify for being eligible for depreciation which means claim expenditure for business.

Business Inventory:- As the nature is of inventory, it is not subject to depreciation and is only used for production or consumption during production process. If the inventory becomes useless, it is expensed off in P&L and not depreciated.

Computer used exclusively for business purposes:- As computer is used exclusively for business, full depreciation can be claimed as expense for business.

A lawn tractor used to mow personal lawn:- The question is not clear as to whether lawn is for busienss purposes or personal purposes. If tractor is used exclusively for personal purposes, depreciation cannot be claimed for business as it is not used for business. If lawn is for business, then depreciation can be claimed in business as expense. If lawn is used both for personal and business purpose, then only that proportion of depreciation can be claimed for business for which part it is used for business.

Oven used for personal use in home:- As oven is used exclusively for personal use, no depreciation can be claimed for business purposes.

ekkarill92 answered 1 year ago

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