Tax Depreciation and Recapture

Tax Depreciation and Recapture covers depreciation terms for accelerated allowances, MACRS-style systems, tax conventions, and recapture treatment.

Use these pages when asset-cost allocation changes earnings, tax timing, cash-flow interpretation, capital intensity, or valuation adjustments. It sits inside Depreciation and Amortization, so readers can move up when the broader accounting context matters.

Use the table below to choose the narrower accounting branch before applying a term to a statement line, model input, audit trail, tax schedule, covenant test, or management report.

What This Branch Covers

What to Check

• Asset cost, useful life, residual value, placed-in-service date, method, convention, and accumulated depreciation or amortization.
• Book policy, tax method, depreciation schedule, impairment history, disposal record, and recapture calculation.
• Effect on EBIT, EBITDA, taxable income, book value, deferred tax, capex, and maintenance-versus-growth spending analysis.
• Whether the figure is book depreciation, tax depreciation, depletion, amortization, or noncash add-back.
• Comparability across methods, asset ages, reporting periods, and capital intensity.

Common Mistakes

• Treating depreciation as current cash spending.
• Ignoring differences between book and tax depreciation.
• Comparing EBITDA without considering replacement capex and asset age.
• Assuming accelerated depreciation changes economic useful life rather than tax or earnings timing.

Depreciation and amortization content is educational and does not provide accounting, tax, audit, legal, investment, or valuation advice.

In this section

Choose a subsection first. Deeper term pages live inside each subsection, which keeps large topic hubs readable.