When filing out the worksheet for Form 4562 Depreciation and Amortization, under the column for method and convention, is the correct entry for a the 3 year property Declining Balance Half Year or Double Declining Balance Half Year? Also, what is the difference between the two depreciation methods?

ANSWER

The BIDaWIZ Team's Answer:

You can elect either declining balance half year or double declining half year as your method and convention. Double declining provides a greater deduction during the earlier recovery years. Please note that it changes to straight line when that method provides an equal or greater deduction. This is detailed in IRS publication 946.