What were the most significant changes in this new tax law? What would be the effect...

What were the most significant changes in this new tax law?
What would be the effect on a business for which you might work as an engineer
Would there be any changes in the way businesses deal with depreciation?
A big change in taxes and depreciation also occurred in the 1980s. Research and summarize the effects of the Accelerated Cost Recovery System (ACRS) on taxes and depreciation. What is your opinion of ACRS?

Solutions

Expert Solution

In 1980's the congress at that time decided for tax reduction and depreciation liberalisation in order to stimulate the economy. Therefore at that period Asset Depreciation Range(ADR) was introduced(1971-1980).

The risks in constructions industry, commercial real estate markets have risen because of local economic factors, regional developments and national economic trends. There is a remarkable downfall in this market.

ADR system lead to raising tax burden and lower real rates of return on investments these were the reasons for low rate of net capital.

Therefore Accelerated Cost Recovery System (ACRS) have introduced. It have changed the rules of taxes and depreciation assets. It lower the effective rate of taxation. ACRS again modified in 1985 as Modified Accelerated Cost Recovery System (ACRS)

For engineers it will be profitable in real estate boom period.

According to the changes in the depreciation the business may run.

Rahul Sunny answered 1 year ago

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