One of the most common questions we get asked is whether the accumulated depreciation on a house that has been purchased is tax deductible. This is no longer the case. The IRS now requires that every contract for the sale of a new home must have a written agreement stating exactly how much depreciation will be paid for the home.
When the depreciation on a home is paid, the tax is still deducted from the income, so no capital gains tax will be triggered. But the IRS requires that the depreciation amount is properly documented in writing. Unfortunately, that writing may not be in the seller’s control (as the buyer may have failed to take care of it).
A good example of how a good book might be written out is the law for a house to be built. A building is a house when it is built. The builder cannot, however, construct a house without a written agreement, but he or she can build the house with the best knowledge and good care.
The rules for depreciation are set forth by the Federal Reserve Board, so they are well established. However, the IRS is, unfortunately, not as well established. I’m not saying that they will never be established, but we are in the process of figuring out how to set the rules.
Im not sure where the IRS would get its information, but we know that building a house requires a lot of work. So it is reasonable to expect that some people will have to work a lot of overtime.
The rules for depreciation are set forth by the Federal Reserve Board but are far from settled. They are, however, well established. Im not saying that they will never be established, but in fact they are. Im not saying that the IRS will continue to keep records of their activities. The IRS is, however, more established than the Federal Reserve. Im not saying that any government agency will continue to keep records of its activities, although that won’t be possible without the IRS.
The IRS still maintains records of its activities. They also maintain a collection of employee information at various locations throughout the state. Those are all locations where there are government records, including the General Manager’s office and the IRS department office.
So what does that mean? Basically your salary is your total assets minus your liabilities. If your total assets are greater than your liabilities, then your salary will be greater than zero. Because at some point in the last 3 years your assets will have increased. You can say that your salary today is the accumulated depreciation of your assets. But because of your liabilities, your salary today is what you will have when you retire. That is your “accumulated depreciated”.
That’s what the IRS is telling us. The IRS is the government agency that collects taxes from people by auditing their returns and sending back a report about how much they owe. This report is called the Federal Register, and it’s used to determine how much taxes we have to pay in the future. And when you retire, you actually start to pay less in taxes every year.
I don’t know about you, but I like the idea that I don’t have to worry about accumulating extra debt. But it does make me wonder if I have a “liability” for what I owe to the IRS. I don’t have to make a big deal out of paying taxes to the government, but it would be nice to have a liability for the government.
