Depreciable Property – Definition

Cite this article as:"Depreciable Property – Definition," in The Business Professor, updated December 9, 2019, last accessed October 24, 2020,


Depreciable Property Definition

Depreciable property is otherwise known as a depreciable asset, this is an asset that can be depreciated following the Internal Revenue Service (IRS) rules. When depreciated, the value of the asset is regarded as business expenses over its useful life, this is deducted from the tax return of the business. Long-term assets are depreciable assets, current or short-term assets d not qualify for depreciation according to the IRS rules.

A Little More on What is Depreciable Property

Depreciable properties are long-term assets whose value can be deducted from tax returns over their useful life. There are certain requirements that property or asset must meet before it qualifies as depreciable property. These requirements are states in Publication 946 of the IRS rule, they are;

  • The property must be used in business and give productive outputs,
  • The property must be owned by the individual,
  • The property must have a fixed useful life which must be over a period of one year.

Long-term assets and certain intangible properties qualify as depreciable property. For intangible property such as patents and copyrights, they are amortized rather than depreciated

Example of Depreciable Property

Depreciable properties or assets include:

  • Landed properties
  • Equipment
  • Business facility
  • Machinery automobiles (trucks and vehicles)
  • Office equipment such as a computer, scanner, projector, and others.

It is important to know that land is not a depreciable property but landed properties such as buildings, warehouses, storage facilities, and other constructions are depreciable properties.

Common Depreciation Methods

The accelerated depreciated method and the straight-line depreciated method are the two common depreciation methods used for depreciable properties. Both methods offer unique ways of calculating depreciation using a number of factors. The depreciation method a company chooses to use depends on the type of asset being depreciated and also for tax purposes as determined by the company.

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