Component Depreciation: A Tax Planning Strategy for Small Businesses


  • Nathan Oestreich San Diego State University
  • Howard R. Toole San Diego State University
  • James E. Williamson San Diego State University


Recent federal   court  and  Internal  Revenue  Service  (IRS)  decisions  have  opened  up  an excellent  opportunity for   both  small  and  large  businesses  to  once  again  use  component depreciation,  thus  accelerating  depreciation  deductions  and reducing  cost  of buildings and improvements  in present  value terms.   Minor changes in the design or in the procedures followed  in purchasing  a building make it possible  to shorten the depreciable lives of portions of the "building". The savings can easily exceed the additional design, construction, and bidding costs especially if the changes are minor. Small business owners,  who may  not always retain  a fulltime  tax  advisor,  should  be  aware  that  it  is  necessary  to  involve  a  tax consultant at the beginning of the design process for construction projects or early in the search for  a building purchase.






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How to Cite

Component Depreciation: A Tax Planning Strategy for Small Businesses. (2001). Journal of Small Business Strategy (archive Only), 12(2), 112-118.

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