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How Does Asset Depreciation Actually Work?

Audio version available here:

Length: approx. 1 min. 20 sec.

Claiming depreciation on your business assets can be confusing, but when done correctly, can result in significant cost savings. Understanding the specifics of when to claim depreciation can help you maximize your benefits. So when does depreciation start? Depreciation begins the moment your asset is ready for business use. Even if the asset is not immediately in use, such as a listed rental property without tenants, you should still initiate the depreciation process. This principle also applies to business vehicles, farming equipment, and similar assets. After you begin claiming depreciation, and the asset is temporarily not in use, like when your rental property is between tenants, you should continue to claim depreciation. You should only cease claiming when you no longer intend to use the asset for business purposes. For instance, if you decide to stop renting your property and sell it instead, then you would stop claiming depreciation. For more in-depth information on depreciation, watch our YouTube video here, or consult our source article. If you are interested in incorporating depreciation into your tax planning strategy, reach out to us at XQ CPA for guidance. Call us at 832-295-3353 to schedule your FREE tax diagnostic. We would love to help you.

Did you know? XQ CPA and OneSelfClub are giving away $10,000 to a select business through our video contest! Find out how to the enter at

large two-story house ready for depreciation claims


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