Depreciation decisions can affect much more than a current-year tax deduction. The method selected today can influence future deductions, adjusted basis, state tax treatment, and the tax consequences when an asset is eventually sold.
2026 Depreciation Essentials takes a practical look at the federal depreciation rules and the planning considerations that surround them. Participants will review placed-in-service requirements, depreciation basis, MACRS, class lives, recovery periods, and conventions before examining opportunities to accelerate the recovery of asset costs.
Particular attention is given to 100% bonus depreciation, Section 179, and the decision to elect out of bonus depreciation and use regular MACRS. The course also considers how state conformity can influence depreciation planning, since state treatment of bonus depreciation may differ from federal treatment.
Additional topics include de minimis rules, repairs versus improvements, vehicle depreciation, and the tax consequences associated with disposing of depreciated property. Participants will examine how previous depreciation deductions reduce adjusted basis and how depreciation recapture can affect the character of gain when property is sold.
Rather than focusing solely on calculations, this course emphasizes understanding the rules and recognizing the factors that may influence depreciation decisions for individual clients.
Learning Objectives
Upon completion of this course, participants will be able to:
- Apply placed-in-service and basis concepts to depreciable assets.
- Identify appropriate MACRS recovery periods and depreciation conventions.
- Explain the application of 100% bonus depreciation to qualifying property.
- Compare bonus depreciation, Section 179, and regular MACRS depreciation.
- Recognize considerations that may influence an election out of bonus depreciation.
- Identify potential state conformity considerations associated with federal depreciation choices.
- Distinguish deductible repairs from expenditures that must be capitalized as improvements.
- Analyze how prior depreciation affects adjusted basis, gain, and depreciation recapture upon disposition.
This course counts for 2 Hours of Federal Tax Law for IRS Continuing Education.
About the presenter:
Jason Dinesen (EA, LPA) is a tax nerd, entrepreneur, tax expert, and a well-known presenter of continuing education courses.
Known for his sharp tax interpretations, he is one of the quickest to bring the analysis of the latest tax updates and IRS guidance to the professional community. Jason has coached over 200,000 accounting, tax, and HR professionals on various topics of accounting, individual taxation, corporate taxation, professional ethics, and much more.
He has presented dozens of webinars on Form 1099 (for 10 years on this subject!), marriage in the tax code, tax updates, the new Form W-4, payroll updates, filing status, tax credits, corporation and partnership taxation, and other issues relating to the modern-day setting.
Frequently Asked Questions
Is taking 100% bonus depreciation always the best choice?
Not necessarily. Although bonus depreciation can allow qualifying property to be fully deducted in the first year, taxpayers can elect out and use regular MACRS depreciation. The course explores planning considerations surrounding that decision.
What is the difference between bonus depreciation and Section 179?
Both can potentially accelerate deductions, but they operate under different rules and limitations. For example, the course discusses certain property that may qualify for Section 179 even though its recovery period would generally prevent it from qualifying for bonus depreciation.
Does state tax treatment affect depreciation planning?
It can. The course discusses how states may differ in their conformity with federal bonus depreciation and Section 179 rules, making it important to consider the client's individual federal and state tax situation.
Does this course cover MACRS depreciation?
Yes. MACRS is a central part of the course. Participants explore recovery periods and the concepts used to determine depreciation when property is not fully deducted in the first year.
Why does depreciation recapture matter when planning for an asset sale?
Depreciation claimed during ownership reduces the property's adjusted basis. When depreciated property is sold at a gain, some of that gain may be treated as depreciation recapture and taxed as ordinary income rather than receiving capital gain treatment.
Does the course focus only on depreciation calculations?
No. While the mechanics of depreciation are covered, the course also emphasizes planning and the decisions surrounding depreciation, including bonus depreciation elections, Section 179, state conformity, repairs versus improvements, and eventual property dispositions.
