Useful Life: Client's Professional Library of Technical Books

[JMO]

Hello,

I was hoping to get some feedback on how other accountants depreciate an attorney's or psychologist's professional library of technical books. Specifically, the number of years.

[Roland Slugg]

Welcome to this discussion forum. For a first post, yours is a good one!

I can find no references in the tax law or other tax sources regarding the depreciation of long-lasting professional books. IMO a lawyer's or other professional's library of references books is a capital asset with no fixed or determinable life. Accordingly, I don't believe they are depreciable. Many lawyers own reference books that date back 50 ... 75 ... even 100 years.

Instead of depreciating a professional's library, I would recommend that each volume be carried on its owner's books at its cost, and if lost, stolen, sold or otherwise removed from service, that cost should then be deducted. If sold, a book's cost would reduce the gain (or increase the loss), and if disposed via any other method, its cost would be deducted as a business expense.

The above refers, of course, to a professional's library of inexhaustible, reference books. Books that are updated and published on an annual basis, such as a CPA's annual tax reference books, should be expensed currently.

[JMO]

Thank you

Roland, thank you for your prompt reply. I appreciate your input and line of reasoning.

[kathyc2]

5 year property per IRS audit guide for attorneys:

http://www.irs.gov/pub/irs-utl/attorneys_atg.pdf

[Roland Slugg]

5 year property per IRS audit guide for attorneys

Wow! How did you find that? I could not.

That guide for attorneys contains the "can't-be-cited-as-authority" disclaimer, but I'm sure that any IRS auditor would follow it during an audit. Depreciation class 57.0 itself is very short and says nothing about assets such as professional reference books.

[Gary2]

Wow! How did you find that? I could not.

That guide for attorneys contains the "can't-be-cited-as-authority" disclaimer, but I'm sure that any IRS auditor would follow it during an audit. Depreciation class 57.0 itself is very short and says nothing about assets such as professional reference books.

57.0 says "Includes assets used in wholesale and retail trade, and personal and professional services." Wouldn't law books be an asset used in a professional service?

[taxea]

5yrs sounds more than reasonable considering they must have to be updated yearly. I would make the updates a renewal office expense.