Dear Nancy....I love when you talk this way!!
In the end...we still depreciate only the difference between the cost of aquisition and the residual value when we eventually sell the thing? That and all the operating expenses?
All we are doing is accelorating the expense, right? If you figure it cost $60,000 and will be worth $18,000 in 5 years...then our depreciable base is $42,000. Normally that would be expensed as $8,400 for each of the 5 years....but instead we can take a larger amount today and have less later? In the end...it only comes down to the tax money we don't spend today we can invest and have longer?
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