Oregon Depreciation Schedule - 2000 (Page 2 of 4) in pdf

Instructions for

O R E G O N

Oregon Depreciation Schedule

D E PA R T M E N T

O F R E V E N U E

For Individuals, Partnerships, Corporations, and Fiduciaries

One-time adjustment

Real property. This type of property includes land and

most buildings or improvements on the land. Land can’t

The 1996 one-time adjustment for Accelerated Cost Re-

be depreciated, but buildings and most improvements

covery System (ACRS) assets was available for individu-

can. Apartment complexes and office buildings are ex-

als, to conform your Oregon basis of ACRS assets to your

amples of depreciable real property.

federal basis. If you did not make the one-time adjust-

ment, the asset will continue to be depreciated differently

Recovery period. This is the length of time over which

for federal than for Oregon and you will continue to make

an asset is depreciated.

modifications on your Oregon return.

Salvage value. This is the amount you expect the prop-

If you elected the 1996 one-time adjustment for ACRS as-

erty to be worth at the end of its useful life (see below).

sets, you may carryover any unused subtraction two

Salvage value is figured when you acquire the property.

years. You may amend your 1997 and 1998 returns within

Section 179 expense. This allows you to claim some

the statutory period to claim a refund based on the

of the cost of certain property as an expense in the year

carryover of the subtraction. Any carryover of the sub-

you acquire it, rather than recovering the entire cost over

traction not fully absorbed in the second carryover year

the property’s recovery period. Oregon allows the same

will be lost.

amount as federal law for the Section 179 expense (see

page 3 for Section 179 limits).

Definitions

Useful life. This is the number of years you can reason-

Amortization. This is an expense similar to deprecia-

ably expect to use the property in your trade or busi-

tion. Amortization allows you to deduct the cost of some

ness, or hold the property to produce income for you.

intangible property over a certain period of time.

Basis of property. Generally, the cost of the property

Assets first placed in service outside Oregon

is its basis. Did you first place assets in service outside

Did you bring assets into Oregon on or after January 1,

Oregon and later bring them into Oregon? If so, the basis

1985? Were they first placed in service outside Oregon

for figuring depreciation is the same basis you would use

on or after January 1, 1985? Assets placed in service in

to figure the gain or loss on the sale of that property.

tax years beginning on or after January 1, 1985, and

Depreciation. This is how you deduct the cost of the

before December 31, 1986, are depreciated using ACRS.

property over its useful life. Property you depreciate must

Assets placed in service on or after January 1, 1987, are

have a useful life of more than one year. Depreciation

depreciated using the Modified Accelerated Cost Recovery

starts when the property is first made available for use

System (MACRS).

(placed in service). You can’t depreciate the cost of land.

Did you first place assets in service outside Oregon after

Intangible property. This is personal property that has

December 31, 1980, but before January 1, 1985? If so,

a value but cannot be seen or touched. Examples of in-

the basis for depreciation will be the lower of either the

tangibles include goodwill, franchises, patents, and trade-

federal unadjusted basis or the fair market value. The

marks. Internal Revenue Code (IRC) Section 197 allows

federal unadjusted basis is the original cost before any

certain intangibles to be amortized over 15 years.

adjustments. Adjustments include: reductions for

investment tax credits, depletion, amortization, or

Nonresidential real property. This is property held for

the production of income or property used in a trade or

amounts expensed under IRC Section 179. The asset’s fair

business. This is IRC Section 1250 real property that is

market value and useful life are figured when the asset

is brought into Oregon. However, if you are subject to

not (1) residential rental property, or (2) property with a

the apportionment rules, basis is computed using original

class life of less than 27.5 years.

cost and 1980 federal depreciation methods.

Personal property. Property which isn’t real property

is generally personal property. Machinery, equipment,

Did you first place assets in service outside Oregon

tools, and vehicles are examples of business personal

before January 1, 1981? If so, your Oregon basis will be

property which can be depreciated.

the same as your federal basis.

Oregon Depreciation Schedule - 2000 Page 2

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