The National Directory of Certified Public Accountants

Ask A CPA - Depreciation

Depreciation - Cost Basis For The Asset’S Purchased

Although you purchased a sole proprietorship for 1 amount, that amount must be allocated to the individual assets for depreciation purposes. Allocation is based on the proportion of the sales price to an individual assets fair market value at the time of the sale. Speak to your local CPA about the allocation formulas.

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