Anti-churning Rules

Anti-churning Rules

Anti-churning Rules are.

depreciation or amortization rules that prevent the sale and repurchase (churning) of assets acquired before 1981 into accelerated cost recovery system (ACRS) property (or, before 1987 into modified accelerated cost recovery system (MACRS) property) in order to obtain more favorable depreciation deductions. Generally, if property was acquired after 1980 (or after 1986 for MACRS treatment), and it was: 1. owned or used by the taxpayer or a related party during 1980 (1986 for MACRS), 2. acquired from the taxpayer who owned it during 1980 (1986 for MACRS), and the user of the property remains the same, 3. leased by the taxpayer to a person who owned or used it during 1980 (1986 for MACRS), or.

4. not ACRS or MACRS property in the hands of the previous owner, and the user of the property does not change, then the taxpayer is precluded from using more favorable ACRS (or MACRS) depreciation. Anti-churning rules also prevent taxpayers from amortizing goodwill and other intangibles.

See Depreciation in the United States Encyclopedia of Law and Depreciation in the World Encyclopedia of Law.






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