Depreciation - Artwork

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What is Depreciable? IRS Publication 946 offers the following guidelines you might want to consider:

  • Is it property you own? (Yes)
  • Is it used in your business? (Yes)
  • Does it have a determinable useful life? (Is it gradually losing value through normal wear and tear? Will it have essentially no value at a certain point, and can you reasonably determine when that is?)
  • Does it have a life of more than one year? (Yes)

Posted by: DaveJohnson

Responded to on: June 29, 2005

In Bruce Selig, 70 TCM 1125, T.C.Memo. 1995–519, the court distinguished exotic automobiles that the taxpayer held for show for a fee (two Lotuses and one Ferrari) from antique cars or museum pieces, and recognized that although they did not suffer the wear and tear, they would, in fact, as state-of-the-art show cars, become obsolete over time, and allowed the taxpayer's depreciation deductions.

Jim S. 16:46, 7 Jul 2005 (CDT)

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