Companies are required to use the straight-line depreciation method for tax purposes because this method yields the lowest depreciation expense and results in the highest payment of tax.

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Companies are required to use a prescribed depreciation method (such as MACRS in the US) for tax purposes, but it is not necessarily the straight-line method. The chosen method may result in a higher or lower depreciation expense, and consequently affect the amount of tax paid.

Companies Are Required to Use the Straight-Line Depreciation Method for Tax