What is accumulated depericiation?

Question

What is accumulated depericiation?

Answer 1

it's generally a business depreciation. Example: say you own a flower shop and buy a $21,000 van which you use to deliver flowers. On your taxes, you would depreciate the value of that van at whatever rate the IRS says is permissable, so we'll say (for ease of understanding) you depreciate said van over a seven year period, meaning the van loses value at a rate of $3000 per year. Five years go buy, so you have depreciated the van to where it is only worth (according to your business) $6000 ($21000-$15000 depreciation). That $15000 you have taken as a business expense over the five years is your accumulated depreciation. Make sense? Your tax advisor/accountant should be able to explain it further.