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What is Depreciation?
Depreciation is the accounting practice of recording the decreasing value of a fixed asset, such as a building or piece of equipment, over time, or, effectively, spreading the tax deduction for the cost of the asset over time.
The IRS has created set schedules which describe the number of years over which a business can amortize the cost of a business asset for the purpose of tax deductions. The number of years is different for each type of asset or equipment.
In its simplest form, depreciation is straight-line, meaning the total cost of the asset is divided evenly across the number of years on the IRS schedule.
There is also accelerated depreciation, where more of the cost is depreciated in the first years and less of it is depreciated afterward, also according to what’s allowed by IRS guidance. Depreciation is listed as an Operating Expense in a company’s accounting books.
What does diversification mean?
Diversification is the strategy of owning securities with different risk attributes to mitigate total risk in a portfolio
What is IRS Publication 1244, Employee’s Daily Record of Tips and Report to Employer?
Publication 531 gives additional details about reporting tip income. Employees who earn tips over $20 a month must report
How to use the Cup-and-Handle (Bullish) Pattern in trading
The Cup-and-Handle pattern is formed when a stock price initially declines and then rises to form a “U”like shape
What is Net Worth?
Net worth is the total value of a person or entity’s assets, minus all of their outstanding liabilities
What does Leverage Mean?
Leverage is the use of borrowed capital or debt to try and increase the potential return of an investment
What is Bad Credit?
Bad credit implies that an individual or business has a low credit score or rating. Credit histories are reported and...
What is Federal Income Tax?
Federal income taxes are paid by individuals in proportion to their earnings, after reducing the considered earnings
What is a commodity pool?
Commodity pools are like the REITs of the commodity world, and some of them can be categorized as hedge funds or MFAs
What is the Capital Market Line?
The Capital Market Line is a complex concept, but put simply, it is a calculation meant to give the investor/analyst...