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by Retric 2771 days ago
Time value of money, if you can deduct something in 2020 vs 2021 you get 1 year of interest on that deduction. Even if you don’t directly invest it, inflation make paying 2020 debts in 2021 dollars a net win.

However, a larger issue is percentage depletion makes it possible to write off more than the cost of the asset. If I buy something for X, then the sum of all of my depression should be X or less.
2 comments
Lazare 2765 days ago
What you're missing is, everyone gets to depreciate their investments. Large oil companies are some of the few who can't.
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ip26 2771 days ago
You are deducting that investment today against the revenue it is producing today, and when you deduct in 2021 you are deducting against 2021 revenue.

We could argue about the shape of the curve we want, but it would not make any sense to deduct at retirement of the asset.

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Retric 2771 days ago
Accelerated Depreciation is a net win for companies. So, the shape of the curve is very much an issue worth considering.

Consider, a company buys and new car and the car’s resale value may tank the day they buy it. Further, companies regularly use things they which have a book value of zero.

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