<p>Question for somemom or anyone who knows the answer. I found the Bowdoin explanation very illuminating. I can understand (though not necessarily agree with) the reasoning behind disallowing the home office deduction and salaries paid to family members, but I don't understand why depreciation is disallowed. I am in a service business. The only "property" my business has are computers, some furniture and a car. My accountant does not deduct the cost of these items when purchased, but deducts a certain amount of their cost each year based on their life expectancy. Is there some other place besides "Depreciation" that the cost of these items should be put? Thanks for the help.</p>
<p>One could buy a new SUV of a certain weight and get a rather substantial depreciation allowance ($24k, if memory serves) in one year. Some schools would add back that amount to income, feeling you had bought a car and that should not be deducted. I think the treat depreciation differently depending on the amount and what it is for.</p>