A taxpayer may elect to use the alternative depreciation system (ADS) to compute depreciation for earnings and profits.

Question

Quizplus · Accepted Answer

This statement is true. A taxpayer can elect to use the alternative depreciation system (ADS) for various reasons, including to reduce their taxable income or to comply with certain tax laws or regulations. Additionally, the ADS may result in different depreciation deductions compared to the standard Modified Accelerated Cost Recovery System (MACRS) and may affect a company's earnings and profits.

A Taxpayer May Elect to Use the Alternative Depreciation System