Accounting & Bookkeeping & Small Business Forum

[pistolmcaction]

Is a cash register depreciated over 5 years or 7 years? I looked it up in Pub. 946, but it didn't mention cash registers specifically.

Would a cash register be considered office equipment and thus be depreciable over 7 years?

Or would it be considered a computer and be depreciated over 5 years?

I thought it was 7, but in doing a problem in the Universal Accounting tax course, they depreciated it over 5 years, so I'm not sure which way is correct?

Any input would be greatly appreciated. Thank you in advance for your time.

[dp1903]

This is just my opinion. Page 31 of Pub 946 Lists "Office machinery" as 5 year property. I see a cash register as machinery like a typewriter or calculator with moving parts, 5 year property. The items under "Office furniture and fixtures" are items which tend to be only furniture or fixtures such as desks, file cabinets, safes, etc. I see the 7 year property as being more durable and lasting longer than machinery, few moving parts, if any.

With practice and experience identifying the appropriate recovery period gets easier.

The IRS is certainly not going to complain if the asset is depreciated over a longer period of time since this will reduce annual expense reported and therefore cause more income to be reported. But, the client won't appreciate it if it is wrong and he/she has to pay more income tax.

[RobJ]

Here's some information that might help. This is a quote directly from the "IRS's Cost Segregation Audit Techniques Guide".

(c) Example 3 - Pam Martin owns a retail-clothing store. During the year, she purchased a desk and a cash register for use in her business. She checks Table B-1 and finds office furniture under Asset Class 00.11. Cash registers are not specifically listed in any of the asset classes in Table B-1. She then checks Table B-2 and finds her activity, retail store, under Asset Class 57.0, Distributive Trades, and which includes assets used in wholesale and retail trade. This description for this asset class does not specifically list office furniture or a cash register.

She looks back at Table B-1 and uses Asset Class 00.11 for the desk, since it constitutes office furniture. The desk has a 10-year class life and a 7- year recovery period for GDS. If she elects to use ADS, the recovery period is 10 years. For the cash register, Pam uses Asset Class 57.0, because cash registers are not specifically listed in Table B-1 but are assets used in retail business. Accordingly, the cash register has a 9-year class life and a 5-year recovery period for GDS. If she elects to use the ADS method, the recovery period is 9 years.

Here is the link to the guide:

http://www.irs.gov/businesses/article/0,,id=134670,00.html

I wish the IRS would be abolished. It's just insane what taxpayers are put through year after year after year after ...

Just my two cents,

Rob

[Richard Noot]

I wish the IRS would be abolished. It's just insane what taxpayers are put through year after year after year after ...

Just my two cents,

Rob[/quote]

Lets leave politics out of it. Besides no one in their right mind would vote for a Democrat.

[RobJ]

Richard Noot wrote: Lets leave politics out of it. Besides no one in their right mind would vote for a Democrat.
OFF TOPIC - I'm not voting for either party this year. I'm just sick of both of them and refuse to cast a vote "again" for the lesser or two evils. Personally, I think we should overthrow the government. They seem to have forgotten who runs this country ... US!

Rob

[Richard Noot]

RobJ wrote: Richard Noot wrote: Lets leave politics out of it. Besides no one in their right mind would vote for a Democrat.
OFF TOPIC - I'm not voting for either party this year. I'm just sick of both of them and refuse to cast a vote "again" for the lesser or two evils. Personally, I think we should overthrow the government. They seem to have forgotten who runs this country ... US!

Rob I am afraid that I have to agree when you state that your sick of both parties. However by casting my vote, if anything, it gives me the right to continue to complain.

[stasia2003]

RobJ wrote: Richard Noot wrote: Lets leave politics out of it. Besides no one in their right mind would vote for a Democrat.
OFF TOPIC - I'm not voting for either party this year. I'm just sick of both of them and refuse to cast a vote "again" for the lesser or two evils. Personally, I think we should overthrow the government. They seem to have forgotten who runs this country ... US!

Rob

Hey! Be careful what you say here. The Secret Service could be monitoring this forum. You know they knock on your door for every little thing. :lol:

[Ahshucks]

Perhaps depreciating over 7 years rather than 5 years maybe more beneficial to the tax payer ... Higher income/rates in years 6 & 7? Then again, it may already qualify for expensing the full cost in the purchase year.

[Richard Noot]

Ahshucks wrote: Perhaps depreciating over 7 years rather than 5 years maybe more beneficial to the tax payer ... Higher income/rates in years 6 & 7? Then again, it may already qualify for expensing the full cost in the purchase year. Depreciating over 7 years rather than 5 years will NOT be more beneficial UNLESS it is truly 7 year property. If it is in fact 5yr property and you choose to depreciate over 7 years instead the IRS will disallow the last two years of depreciation The law says allowed or allowable.

[cdiii3]

There's no reason to be paranoid about the "allowed or allowable" rule for depreciation/amortization. The method can be changed at, and after, disposition (Rev Procs 2002-9 and 2004-11).

[jdet]

:) Simply you can just ask your accountant.