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When does depreciation begin on new manufacturing equipment?

Short answer

Generally, when the equipment is ready and available for its intended business use. The purchase date, payment date and operational readiness can differ. The deduction also depends on classification and applicable federal and state rules.

Example

Equipment delivered in December but requiring installation may have a different placed-in-service date.

What to review

Invoices, installation and readiness records, business use, financing and the depreciation method.

Official source: www.irs.gov/publications/p946

Related service: Automotive Manufacturing Accounting

This answer is general information, not advice for your specific situation. Tax rules change, so please contact us to review your facts before acting.

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