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How do you depreciate preferred stock under MACRS method? In this case it's a corporation that...

How do you depreciate preferred stock under MACRS method? In this case it's a corporation that owns stock in another corporation.

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Depreciation by MACRS method

Before knowing the method of how to depreciate any preferred stock, first we should know that what is MACRS method, so basically it stands for Modified Accelerated Cost Recovery System, and it is meant for the people in United States that the current tax is depreciated. Its main procedure is the capitalizing the cost of tangible properties which is recovered from a specific life which is annually deducted for the procedure of depreciation.

The formula by which MACRS depreciation can be calculated is,

General Depreciation System(GDS) using 200% of Declining-Balance(DB), which validates of several years, such as 3years, 5years, 7years and 10years subtracted by the tax depreciation method given a significant tax deduction in its earliest years.

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