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Depreciation

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NEWS
July 11, 2013
D EAR HARRY : A few years ago, we moved to an apartment and rented out our home. We always reported the rent on our tax returns, and we deducted our expenses. My wife got tired of being a landlord because of the problems of neglect by tenants, as well as vacancies. As a result, we sold the property in 2011 for $42,000 more than we paid. We reported the gain on our 1040. Recently, we were notified by the IRS that they wanted to review our return for 2011. The examiner told us that we had to report the gain based on some lower cost because of depreciation.
REAL_ESTATE
December 28, 1986 | By Jennifer Lin, Inquirer Staff Writer
Real estate salespeople are enjoying a windfall this winter, thanks to changes in the tax law that make it advantageous for investors both to buy and sell properties before the new year. On the sell side, some investors with rental property or land that has appreciated handsomely in recent years are taking their profits now, in order to benefit from lower taxes on capital gains. Next year, the maximum tax on capital gains will rise to 28 percent, up from the current maximum of 20 percent on long-term capital gains.
NEWS
April 18, 2013 | By Peter Mucha, Philly.com
The cost of owning and operating a car has gone up again - to $9,122 a year for a fully insured sedan driven 15,000 miles, according to AAA. Surprisingly, gas prices were not the biggest culprit in the rise from 2012 to 2013. Blame maintenance and repairs cost for an extra $75, gas for about $40 of the overall hike of about $175. Insurance and depreciation accounted for the rest. In total dollars, depreciation, or decline in a car's resale value, was the largest cost.
REAL_ESTATE
May 18, 1986 | By Kenneth R. Harney, Special to The Inquirer
If you own a home, invest in real estate and are trying to figure out what the Senate's tax-revision bill will mean to you, do not jump to any dramatic conclusions, positive or negative, yet. What you have been reading in the headlines is very likely not what Congress will pass. The tax-reform train that shot through the Senate Finance Committee faces a far slower, steeper track ahead - particularly in regard to its real estate provisions. Here is a peek at what is in the bill, where it is headed and how it could affect you: First, whether this or any other tax legislation is enacted in 1986, owners of primary and second homes are guaranteed winners.
NEWS
November 7, 1995 | By James M. O'Neill and Matt White, FOR THE INQUIRER Inquirer correspondent Sonya Senkowsky contributed to this article
The state Supreme Court has upheld a lower court ruling that will force West Deptford to refund $4.4 million in overpaid taxes to its largest taxpayer, the Coastal Eagle Point Oil Co. Despite the township's request, the state's highest court decided not to hear the case, letting stand a unanimous Appellate Court decision that West Deptford had overcharged Coastal for taxes during three years in the 1980s. The Appellate Court's decision in favor of Coastal was not unusual. In 1993 and 1994 alone, municipalities in Burlington, Camden and Gloucester Counties were told to return million of dollars in taxes on business properties.
SPORTS
September 23, 1993 | by Dick Jerardi, Daily News Sports Writer
Last spring, Bob Brennan rather emphatically said he was selling Garden State Park, no matter what. Over the next several months, Brennan, the board chairman of International Thoroughbred Breeders Inc., the track's parent company, entertained a number of offers. But in the end, Brennan and his board of directors decided that ITB's best plan was to continue to operate the race track, develop unused portions of the property and reorganize the company in such a way that its economic advantages, such as an approximately $155 million carry-forward tax loss, are best utilized.
NEWS
May 30, 1991 | BY J. MICHAEL BOLINSKI
As the recession continues to take its toll - perhaps deepened by the sacrifices extracted from us by last year's no-new-tax increase - many of us can take heart in the fact that at least the bankruptcy laws were greatly liberalized during the notorious reign of Ronald Reagan. But if we are that hard pressed, ought we not have a better survival option than to declare bankruptcy? And ought not the tax code subsidize it, as it does so many other survival mechanisms in our free market system (such as subsidized "insurance" for bank and S&L depositors, or welfare payments to corporate farms)
NEWS
February 13, 1992
Does anybody really think that the tax code has been too tough on takeover artists? No way. Yet powerful politicians on Capitol Hill are pushing a tax break that could spark a new round of companies' being traded like so many baseball cards. Adding insult to injury, there's a risk that the final tax bill would make this new policy retroactive - enriching people for deals done in the debt-craven 1980s at taxpayers' expense. At issue is the desire of companies to get a tax break from the "depreciation" of non-physical assets that fall under the general category of "good will.
BUSINESS
February 11, 1991 | By Susan Warner, Inquirer Staff Writer
Like a ghost on a haunting, it rises up from the dead real estate tax- shelter industry to torment taxpayers. Phantom income. Thousands of investors who reaped big tax breaks in the 1980s through real estate investments now are facing tax problems in the guise of what accountants and the IRS call "phantom income. " Phantom income is income that appears - on paper - when an investor sells or otherwise ends an investment in a real estate tax shelter. Until that point, the investor has been taking deductions, primarily depreciation, on the full price of the property, even though he or she has not paid for it in full.
REAL_ESTATE
December 19, 1986 | By Robert J. Bruss, Special to The Inquirer
Last year, I bought a 10-unit apartment building for eight times its gross income. I recently sold it for over nine times gross. A friend told me I sold too cheap. Do you think I made a bad mistake to sell for only nine times gross? I don't know. The gross-income method of valuing income property is not a reliable technique because it does not consider the building's expenses and the resulting net income. Unless your buyer made a large cash down payment, it will be very difficult for him to get a positive cash flow if the sales price was nine times the gross rental income.
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NEWS
July 11, 2013
D EAR HARRY : A few years ago, we moved to an apartment and rented out our home. We always reported the rent on our tax returns, and we deducted our expenses. My wife got tired of being a landlord because of the problems of neglect by tenants, as well as vacancies. As a result, we sold the property in 2011 for $42,000 more than we paid. We reported the gain on our 1040. Recently, we were notified by the IRS that they wanted to review our return for 2011. The examiner told us that we had to report the gain based on some lower cost because of depreciation.
NEWS
April 18, 2013 | By Peter Mucha, Philly.com
The cost of owning and operating a car has gone up again - to $9,122 a year for a fully insured sedan driven 15,000 miles, according to AAA. Surprisingly, gas prices were not the biggest culprit in the rise from 2012 to 2013. Blame maintenance and repairs cost for an extra $75, gas for about $40 of the overall hike of about $175. Insurance and depreciation accounted for the rest. In total dollars, depreciation, or decline in a car's resale value, was the largest cost.
BUSINESS
February 17, 2010 | By Diane Mastrull INQUIRER STAFF WRITER
On new-car lots, they're the shoppers who don't get a rush from what's under the hood. That's assuming they even venture onto lots that offer anything not pre-owned. They are economists, finance professors, and accountants - numbers professionals who, by nature, are analytical, not impulsive. To them, a car is something that gets you from one place to another. The cheaper it comes, and the bigger the gas mileage, the better. Extras? Get real. As American consumers engage in collective hand-wringing over whether to buy new wheels now, amid a pileup of uncertain economic conditions and auto recalls, here is a glimpse into the car-buying philosophies and practices of some of the region's fiscal conservatives.
BUSINESS
December 17, 2004 | By Todd Mason INQUIRER STAFF WRITER
In the latest installment of its shrinking act, Cigna Corp. is selling paintings and giving away museum pieces acquired in eras when corporate America could afford to reflect on its legacy. The Philadelphia insurer sold 51 paintings in an auction Wednesday at Sotheby's in New York, the second in a series of sales to be held this year and next. Cigna plans to donate other paintings and its historical collections to museums here and in Washington and Hartford, Conn. Cigna is rebuilding its health-insurance business after a series of layoffs and divestitures.
BUSINESS
July 28, 2004 | By Linda Loyd INQUIRER STAFF WRITER
GlaxoSmithKline P.L.C. reported a 13 percent decline in second-quarter profit, dragged down by generic competition for one of its top-selling drugs, the antidepressant Paxil, and depreciation of the U.S. dollar against foreign currencies. The results, however, were better than analysts had expected. London-based Glaxo, which releases its financial results in British pounds, said yesterday that net income fell to 1.16 billion pounds, which is $2.09 billion, from 1.33 billion pounds, which is the equivalent of $2.15 billion, in the second quarter last year.
BUSINESS
April 29, 1997 | By Rich Heidorn Jr., INQUIRER STAFF WRITER
Peco Energy reported a 25 percent drop in first-quarter earnings yesterday, citing warm weather, the continued shutdown of the Salem nuclear plant, and accelerated depreciation of the Limerick nuclear plant. Peco reported net income of $113 million, or 49 cents per share, for the quarter that ended March 31, down from $150 million, or 65 cents per share, from a year earlier. Decreased heating demand and the accelerated depreciation of Limerick, a response to the coming of electric competition, cost 6 cents a share.
NEWS
November 7, 1995 | By James M. O'Neill and Matt White, FOR THE INQUIRER Inquirer correspondent Sonya Senkowsky contributed to this article
The state Supreme Court has upheld a lower court ruling that will force West Deptford to refund $4.4 million in overpaid taxes to its largest taxpayer, the Coastal Eagle Point Oil Co. Despite the township's request, the state's highest court decided not to hear the case, letting stand a unanimous Appellate Court decision that West Deptford had overcharged Coastal for taxes during three years in the 1980s. The Appellate Court's decision in favor of Coastal was not unusual. In 1993 and 1994 alone, municipalities in Burlington, Camden and Gloucester Counties were told to return million of dollars in taxes on business properties.
NEWS
September 9, 1995 | by Jim Smith, Daily News Staff Writer
A federal appeals court in Philadelphia yesterday issued an opinion that will be music to the ears of professional musicians throughout the country - but not very pleasing to the Internal Revenue Service. The unanimous three-judge panel of the U.S. 3rd Circuit Court of Appeals ruled that valuable musical instruments can be depreciated for tax purposes "when used as a tool of the trade" even if their value to collectors increases over time. The ruling stems from a tax dispute filed by string bass player Brian P. Liddle, a former Philadelphia musician who now plays with the Minnesota Symphony.
NEWS
March 9, 1995 | By Andrew Metz, INQUIRER CORRESPONDENT
In an effort to pull out of an ailing investment, the supervisors have liquidated part of a stake from the police pension fund that has been tied up in shares of a limited partnership since the 1980s. Although the township has put aside roughly $400,000 in dividends from the investment over the years, the shares have been steadily depreciating in value. The total investment was originally worth a total of $1.6 million, but if sold today it would be worth $600,000 less. At their meeting last week, the supervisors voted unanimously to liquidate $100,000 worth of shares in the partnership - shares that have lost $80,000 since in 1988.
SPORTS
September 23, 1993 | by Dick Jerardi, Daily News Sports Writer
Last spring, Bob Brennan rather emphatically said he was selling Garden State Park, no matter what. Over the next several months, Brennan, the board chairman of International Thoroughbred Breeders Inc., the track's parent company, entertained a number of offers. But in the end, Brennan and his board of directors decided that ITB's best plan was to continue to operate the race track, develop unused portions of the property and reorganize the company in such a way that its economic advantages, such as an approximately $155 million carry-forward tax loss, are best utilized.
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