Show Your YOU Income Tax No 21 I Deductions for depreciation form torm torman forman forman an Important Item In the returns of many taxpayers and are the subject of frequent Inquiries The word depreciation Is not used by the revenue act of 1926 which provides for a reasonable allow show allowance ance anco for the tho exhaustion wear and tear of property used In the trade or 01 business Including a reason renson- able allowance for tor obsolescence For such allowance usually Is referred to by regula regula- regulations regulations regulations relating to the Income tax as depreciation In claiming a 11 deduction for or de depreciation de- de depreciation several several fundamental princIples must be observed The deduction must be confined to property actually used In tire the trade business profession or ye- ye voI vo vocation I cation In general It applies I to the taxpayers taxpayer's capital assets assets- buildings assets buildings machinery the etc etc the cost of which can not be deduct deducted d w u ua wa usa a business business expense A building or machine gradually becomes old and worn orn out On account of this depreciation the value of such assets Is decreased A loss lose is b thereby sustained for which the tho taxpayer Is entitled to recognition r recognition tion lion In making hi Ills his return of ln- ln In Income com come Depreciation may be claimed on nil all business property which In- In In Includes not only buildings and machinery of a permanent char char- character character acter but farm tarm tors trac- trac tractors tors lors mine mind and mill equipment office of rice furniture abd a d books A lawyer doctor or other professional monal may not charge off oft as a current expense the tho cost of ot a library used wholly In his pro pro- professIon profession pro profession this being a capital ex- ex ex and the library a cape cap capital tel tal asset But he ho may deduct an allowance for depreciation baad upon the useful life of the tho ho library |